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Article
Superior vs. Inferior Voting Shares: Price Premium or Discount?
Author(s)
Yan He, Junbo Wang, Chunchi Wu
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DOI:10.17265/1548-6583/2016.06.002
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ABSTRACT
This paper analyzes the price difference between superior voting (SV) and inferior voting (IV) shares for three dual-class firms: Farmer Mac as a big price discount case, Fox as a price similarity case, and Heico as a big price premium case. We show that the price difference is mainly affected by the control benefit, while voting power and liquidity are also relevant factors. We suggest that the control benefit can be revealed by examining share accumulation and firm performance.
KEYWORDS
superior voting (SV), inferior voting (IV), price premium, price discount, dual classes
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