Abstract

This study’s objective was to examine the relationship between corporate governance and the stock prices of companies listed on the Market for Alternative Investment (MAI) by using the Feltham-Ohlson (FO) Valuation Model. The study’s population was 45 MAI-listed companies whose securities were first traded before 2008. Regression analysis was used to test the research hypotheses. The findings show that the CG Rating met the “Clean surplus relation” condition and furthermore, with 95% confidence, the changes in 2009, 2010 and 2011 stock prices could possibly be explained by the FO valuation model. Nonetheless, the unusual correlations that did not follow the FO framework provide two conclusions: (1) MAI-listed companies’ capital structure during 2009-2011 might not have had an impact on firm valuations, and (2) investors did not use publicized CG Ratings in their decision-making.