The valuation of closed-end investment companies
This paper examines the proposition that fluctuations in discounts of closed-end funds in Singapore are driven by changes in management fees . The agency cost theory implies that higher management fees lead to higher discounts and that fluctuations in management fees causes discounts to fluctuate...
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| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project |
| Language: | English |
| Published: |
2015
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/63535 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | This paper examines the proposition that fluctuations in discounts of closed-end funds in
Singapore are driven by changes in management fees . The agency cost theory implies that
higher management fees lead to higher discounts and that fluctuations in management fees
causes discounts to fluctuate. The evidence partially supports these predictions. Based on
our findings, we conclude that there is convincing support for the hypothesis that higher
management fees lead to closed-end fund share prices in Singapore being traded at a
discount to their net asset value (NAV) . On the other hand, only weak support was shown
to support the premise that fluctuations in management fees and fluctuations in discounts
are positively correlated. |
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