1.LTD Corporation is concerned that Aquire, Inc. may wish to launch a hostile take-over of LTD. Which of the following strategies is a good defensive measure? A) Concentration of shares among certain financial institutions who favor company changes. B) Broad global ownership diversification of a company’s shares can minimize a hostile take-over. C) Purchase a foreign company in a different market place to create a broader investor base. D) Selling a foreign subsidiary to reduce the number of shareholders. The correct answer was B) One good reason why a company may want to list its securities abroad is concern of take-over acquisitions by domestic competitors. This can be minimized by global diversification of the company’s shares. 2.The Universal Pipe Corporation (UPC) wishes to list its common shares on the Frankfurt Stock Exchange. UPC does not currently have any business in Germany. Which of the following is NOT a valid reason for UPC to list its securities on the Frankfurt exchange? A) International diversification makes the firm a more attractive takeover candidate for domestic companies. B) Being on the exchange will provide broad diversification for its shares with a large German investor base. C) Listing a company abroad provides additional advertising opportunities for the company's products and services. D) Listing on the Frankfurt Stock Exchange will provide access to excellent external financing resources in Germany with a huge commercial market. The correct answer was A) There are four reasons why a company may want to list its securities abroad. §
A company may desire a broader diversification of its capital across international boundaries. §
Concern of take-over acquisitions by domestic competitors is minimized by global diversification of the company’s shares. §
In the case where a company wants to raise additional external financing, exposure to broader capital markets provides access to additional resources. §
Listing a company abroad provides additional advertising opportunities for the company’s products and services. 3.Which of the following is a good reason for a U.S. company to list its shares on a foreign stock exchange? A) Avoid SEC registration and listing requirements. B) Create mobility for the company’s executives. C) Create additional trading opportunities for the company’s investment bankers. D) Provide additional advertising opportunities for a U.S. company’s products. The correct answer was D) There are four reasons why a company may want to list its securities abroad. §
A company may desire a broader diversification of its capital across international boundaries. §
Concern of take-over acquisitions by domestic competitors is minimized by global diversification of the company’s shares. §
In the case where a company wants to raise additional external financing, exposure to broader capital markets provides access to additional resources. §
Listing a company abroad provides additional advertising opportunities for the company’s products and services. | 
发表于 2008-4-17 18:53
|