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Is individual trading priced in the preferred stock discount?
- Is individual trading priced in the preferred stock discount?
- Park, Cheol; Choi, Paul Moon Sub; Choi, Joung Hwa
- Ewha Authors
- SCOPUS Author ID
- Issue Date
- Journal Title
- EMERGING MARKETS REVIEW
- EMERGING MARKETS REVIEW vol. 38, pp. 326 - 346
- Preferred stock discount; Noise trader risk; Individual trading weight
- ELSEVIER SCIENCE BV
- SSCI; SCOPUS
- Document Type
- 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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- 경영대학 > 경영학전공 > Journal papers
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