Effect of Free Float Ratio on the Behavior of Shares Valuation in Companies Listed in Latin American Capital Market

Firm Value - Theory and Empirical Evidence

INTECHOPEN LIMITED

Año: 2018; p. 33 - 52

Free float, is defined as the number of issued shares minus the number of shares that are restricted in trading (Chan et al, 2004). This restriction occurs in cases where the shares are in the hands of strategic investors such as governments, corporations, majority shareholders, among others (Caliskan and Kerestecioglu, 2013), who do not usually negotiate their holdings. Consequently, the ownership structure of the capital of each company can condition the share?s prices and trading volume.In this sense, the objective of this chapter is to show if there is a relationship between the Floating Capital Ratio and the volumes operated in the capital market, the volatility of prices and the performance of the shares. For this, data are taken, at the end of 2016, in Latin American companies that make up the indexes of the countries of Argentina, Brazil, Chile, Peru and Colombia.