The effect of voting rights on firm value

Cristina Mabel Scherrer and Marcelo Fernandes

International Review of Finance, 2021, vol. 21, issue 3, 1106-1111

Abstract: We present a simple framework for dual‐class stock shares in which common shareholders receive public and private cash flows (i.e., dividends and any private benefit of holding voting rights) and preferred shareholders only receive public cash flows. We isolate these two cash flows in order to identify the role of voting rights on equity‐holders' wealth. In particular, using a structural cointegrated VAR model, we find a negative relationship between the value of the voting right and the preferred shareholders' wealth.

Date: 2021
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https://doi.org/10.1111/irfi.12318

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Working Paper: The effect of voting rights on firm value (2021)
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