Download or read book Short Sale Constraints, Differences of Opinion, and Overvaluation written by Rodney D. Boehme and published by . This book was released on 2011 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Miller (1977) hypothesizes that dispersion of investor opinion in the presence of short-sale constraints leads to stock price overvaluation. However, previous empirical tests of Miller's hypothesis have examined the valuation effects of only one of these two necessary conditions. We examine the valuation effects of the interaction between differences of opinion and short sale constraints. We find robust evidence of significant overvaluation for stocks that are subject to both conditions simultaneously. Stocks are not systematically overvalued when either one of these two conditions is not met.