Equity, IPOs & Strategic Listing
What are shares of a company also known as?
Stock or Equity
What advantage do global capital markets have over domestic ones?
More liquidity, broader investors, less local risk.
What term describes listing a company’s stock on more than one country’s stock exchange?
Cross-listing
What is the risk of a currency's value changing while holding or repaying a foreign loan?
FX risk.
Name one non-financial reason a company might list on a foreign exchange.
Branding, talent, or customer alignment.
What do companies often seek when borrowing in global capital markets?
ower rates, longer terms, diverse funding.
What is the main reason firms list their shares on foreign exchanges?
To access cheaper and broader capital.
What financial instrument can a company use to hedge against FX risk?
Forwards, futures, swaps.
Why is there no 'true' global equity market like there is with currencies or bonds?
National rules keep markets fragmented.
Why do developing countries often use global markets to raise funds?
Domestic markets lack size, stability, trust.
What kind of firms often cross-list to make acquisitions easier?
Multinationals.
Why doesn’t hedging completely eliminate FX risk for long-term loans?
Derivatives don’t cover long terms well.
Which Chinese company raised $25 billion through the largest IPO ever on the NYSE in 2014?
Alibaba.
What major change in the 1980s and 1990s helped global equity markets grow?
Deregulation allowed freer capital flow.
Cross-listing in the U.S. led to what percent average cost of capital reduction for Hong Kong firms?
2.35%.
Borrowing in dollars at 6% seemed smart for Korean firms, but what was the real cost after depreciation?
Nearly 59%.
What major change in the 1980s and 1990s helped global equity markets grow?
Deregulation.
What is one reason regulation can raise the cost of capital in domestic markets?
High compliance and disclosure costs.
In 1994, which German company raised $300 million by issuing shares in Singapore?
Daimler-Benz.
What happened to the Korean won in the 1997 Asian Financial Crisis?
Lost about one-third of its value.