Please use this identifier to cite or link to this item:
http://hdl.handle.net/10071/10313
Author(s): | Pereira, J. Cutelo, T. |
Date: | 2013 |
Title: | Tiny prices in a tiny market: evidence from Portugal on optimal share prices |
Volume: | 19 |
Number: | 3 |
Pages: | 579-598 |
ISSN: | 1354-7798 |
Keywords: | Price per share Liquidity Valuation Stock split |
Abstract: | The Portuguese stock market provides a natural experimental area to analyse theories of optimal price per share. Its characteristics suggest that prices should be very low. Using a sample of 20 stocks from the main Portuguese Stock Index from 1999 to 2010, we observe that Portuguese corporations indeed seek extremely low prices per share through stock splits and similar actions. However, we find that low-price stocks are actually less liquid than high-price stocks. Furthermore, low-price stocks trade at lower valuation ratios. Our results do not support any of the existing theories on optimal price per share and therefore add to the nominal share price puzzle. |
Peerreviewed: | Sim |
Access type: | Embargoed Access |
Appears in Collections: | BRU-RI - Artigos em revistas científicas internacionais com arbitragem científica |
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File | Description | Size | Format | |
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publisher_version_Pereira_et_al_2013_European_Financial_Management.pdf Restricted Access | 147,03 kB | Adobe PDF | View/Open Request a copy |
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