Is individual trading priced in the preferred stock discount?
- 주제(키워드) Preferred stock discount , Noise trader risk , Individual trading weight
- 주제(기타) Business, Finance; Economics
- 설명문(일반) [Park, Cheol] Seoul Natl Univ, Business Sch, 1 Gwanak Ro, Seoul 08826, South Korea; [Choi, Paul Moon Sub] Ewha Womans Univ, Coll Business Adm, 52 Ewhayeodae Gil, Seoul 03760, South Korea; [Choi, Joung Hwa] Kangnam Univ, Div Global Business Adm, 40 Gangnam Ro, Yongin 16979, Gyeonggi Do, South Korea
- 등재 SSCI, SCOPUS
- 발행기관 ELSEVIER SCIENCE BV
- 발행년도 2019
- URI http://www.dcollection.net/handler/ewha/000000160189
- 본문언어 영어
- Published As http://dx.doi.org/10.1016/j.ememar.2018.03.006
초록/요약
Individuals have long been blamed for noise trader risk. Moreover, the literature suggests that the discount of preferred shares against comparable common equities is due to dual-class differences in dividend yield, voting rights, management control, and turnover. In this paper, we argue and present evidence that noise trader risk, as proxied by the individual trading weight, explains the preferred stock discount observed in the Korean stock market after controlling for the conventional determinants. This main result and additional considerations empirically support the presence of noise trader risk.
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