A Model of International Asset Pricing with a Constraint on the Foreign Equity Ownership

Volume: 41, Issue: 4, Pages: 897 - 914
Published: Sep 1, 1986
Abstract
This paper derives a closed-form valuation model in a two-country world in which the domestic investors are constrained to own at most a fraction, δ, of the number of shares outstanding of the foreign firms. When the “δ constraint” is binding, two different prices rule in the foreign securities market, reflecting the premium offered by the domestic investors over the price under no constraints and the discount demanded by the foreign investors....
Paper Details
Title
A Model of International Asset Pricing with a Constraint on the Foreign Equity Ownership
Published Date
Sep 1, 1986
Volume
41
Issue
4
Pages
897 - 914
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