Tiny prices in a tiny market: evidence from Portugal on optimal share prices

Detalhes bibliográficos
Autor(a) principal: Pereira, J.
Data de Publicação: 2013
Outros Autores: Cutelo, T.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: https://ciencia.iscte-iul.pt/public/pub/id/10398
http://hdl.handle.net/10071/10313
Resumo: 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.
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spelling Tiny prices in a tiny market: evidence from Portugal on optimal share pricesPrice per shareLiquidityValuationStock splitThe 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.Wiley-Blackwell2015-12-03T19:31:45Z2013-01-01T00:00:00Z20132015-12-03T19:30:09Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://ciencia.iscte-iul.pt/public/pub/id/10398http://hdl.handle.net/10071/10313eng1354-7798Pereira, J.Cutelo, T.info:eu-repo/semantics/embargoedAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T18:00:36Zoai:repositorio.iscte-iul.pt:10071/10313Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:32:09.069056Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Tiny prices in a tiny market: evidence from Portugal on optimal share prices
title Tiny prices in a tiny market: evidence from Portugal on optimal share prices
spellingShingle Tiny prices in a tiny market: evidence from Portugal on optimal share prices
Pereira, J.
Price per share
Liquidity
Valuation
Stock split
title_short Tiny prices in a tiny market: evidence from Portugal on optimal share prices
title_full Tiny prices in a tiny market: evidence from Portugal on optimal share prices
title_fullStr Tiny prices in a tiny market: evidence from Portugal on optimal share prices
title_full_unstemmed Tiny prices in a tiny market: evidence from Portugal on optimal share prices
title_sort Tiny prices in a tiny market: evidence from Portugal on optimal share prices
author Pereira, J.
author_facet Pereira, J.
Cutelo, T.
author_role author
author2 Cutelo, T.
author2_role author
dc.contributor.author.fl_str_mv Pereira, J.
Cutelo, T.
dc.subject.por.fl_str_mv Price per share
Liquidity
Valuation
Stock split
topic Price per share
Liquidity
Valuation
Stock split
description 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.
publishDate 2013
dc.date.none.fl_str_mv 2013-01-01T00:00:00Z
2013
2015-12-03T19:31:45Z
2015-12-03T19:30:09Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://ciencia.iscte-iul.pt/public/pub/id/10398
http://hdl.handle.net/10071/10313
url https://ciencia.iscte-iul.pt/public/pub/id/10398
http://hdl.handle.net/10071/10313
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 1354-7798
dc.rights.driver.fl_str_mv info:eu-repo/semantics/embargoedAccess
eu_rights_str_mv embargoedAccess
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dc.publisher.none.fl_str_mv Wiley-Blackwell
publisher.none.fl_str_mv Wiley-Blackwell
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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