The value of corporate voting rights embedded in option prices

Cite This

Files in this item

Files Size Format View

There are no files associated with this item.

KIND, Axel, Marco POLTERA, 2013. The value of corporate voting rights embedded in option prices. In: Journal of Corporate Finance. 22, pp. 16-34. ISSN 0929-1199. Available under: doi: 10.1016/j.jcorpfin.2013.03.004

@article{Kind2013value-25546, title={The value of corporate voting rights embedded in option prices}, year={2013}, doi={10.1016/j.jcorpfin.2013.03.004}, volume={22}, issn={0929-1199}, journal={Journal of Corporate Finance}, pages={16--34}, author={Kind, Axel and Poltera, Marco} }

Kind, Axel terms-of-use 2013-12-20T09:52:20Z Poltera, Marco 2013-12-20T09:52:20Z Kind, Axel The value of corporate voting rights embedded in option prices eng 2013 Journal of Corporate Finance ; 22 (2013). - S. 16-34 This paper proposes and tests a new method to extract the value of corporate voting rights from market prices of American-style single-stock options. The method models voting-right values as non-cash dividends and backs them out via numerical optimization from prices of equity options. Simulation experiments show that the method is accurate and outperforms existing option-based approaches by reducing their measurement error from 17.2% to 1.57% in terms of root mean squared errors and almost eliminates their bias.<br /><br /><br /><br />The paper also contributes an empirical analysis of corporate voting-right values in European companies in the time period between 2003 and 2010. Voting rights have an annualized average value of 0.37% of the share price and are significantly worth more in months in which either ordinary or extraordinary general meetings take place but no single shareholder holds a majority stake in the company. Finally, voting values are higher in companies incorporated in French-civil-law countries (France and the Netherlands) than in German-civil-law countries (Germany and Switzerland). Poltera, Marco

This item appears in the following Collection(s)

Search KOPS


My Account