Abstract
In the 1980s, stock exchanges and eventually, the SEC took actions that affected the eligibility of listed firms to adopt dual classes of shares with differential voting rights. We find that risk-adjusted stock returns increase (decline) significantly on days surrounding such actions that increase the probability of banning (allowing) dual-class shares. The stock market reaction varies across firms systematically suggesting that there is a negative view of dual classes in firms with entrenched managers and is viewed somewhat positively when there is a benefit to protecting management. Dual-class structures do not harm shareholders in very young firms.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
