Cost of capital in global markets
DGP Inc is planning an expansion of its business operations internationally by adding a subsidiary (FDI) in Spain. The CFO has approached three investment banks, 2 in the USA and 1 in Europe, to provide the firm with financial information regarding the cost of capital in their respective markets, and also in major capital markets globally.
- Explain what is meant by global sourcing of capital.
- Explain what is meant by the terms Systematic risk, Unsystematic risk, and Beta as related to Investment in shares of public organizations.
- According to Eiteman, Stonehill, and Moffett (2010) “Depository receipts (depository shares) are negotiable certificates issued by a bank to represent the underlying shares of stock, which are held in trust at a foreign custodian bank” (p. 393) Define and contrast American Depository Receipts (ADRs,) and Global Depository Receipts (GDRs).
- What is meant by the term “Cross-Listing?”
- What is the difference between “Eurodollars” an “Euronotes?”