This dissertation examines the valuation and financial histories of a sample of 152 British firms which had differential voting right/multiple ordinary share (DVR/MOS) classes outstanding at some time during the period 1955-1982. On average, the superior voting rights shares (SVS) had market prices which were 13.3% higher than the otherwise equivalent class of restricted voting rights shares (RVS). The mean "voting rights premium" (VRP) for a subsample of these firms which also had voting preferred stock outstanding was 23.0%, while the mean VRP for a subsample of nine companies which were subsidiaries of other firms was 6.0%. / 43 of the sample companies were acquired while they had multiple share classes outstanding and a higher price was paid for the SVS class than for the RVS class in 37 cases. This evidence, combined with results obtained from regression analyses, supports the conclusion that this "tender offer premium" is the fundamental cause of the ongoing voting rights premium. / This dissertation also examines the rationale for and wealth effects of RVS issuance and, often, subsequent retirement. In 136 of 142 cases which could be fully documented, RVS were created through noncash issues and the average size of these issues relative to the existing ordinary share class was amost 80%. Furthermore, there were negative excess returns of -7.8% in the month of RVS issue and, in 49 cases, sample firms voluntarily chose to fully enfranchise (retire) the RVS. This evidence is consistent with the idea that the issuance of RVS creates needless deadweight agency costs. / Other evidence, however, supports the idea that a DVR/MOS capital structure can be a socially optimal form of equity organization. There are significant positive excess returns of 4.81% in the month of announcement of a plan to issue RVS, and negative excess returns in the year following retirement. Corporate insiders are also major shareholders who own an average of 31.4% of the SVS and 10.1% of the RVS of the sample firms. / Source: Dissertation Abstracts International, Volume: 47-12, Section: A, page: 4467. / Thesis (Ph.D.)--The Florida State University, 1986.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_75981 |
| Contributors | MEGGINSON, WILLIAM LEON., Florida State University |
| Source Sets | Florida State University |
| Detected Language | English |
| Type | Text |
| Format | 152 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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