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International Equity Markets Global Stock Exchanges

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Global Stock Exchanges

More and more corporations these days are choosing to list their stock not just on one exchange, and not even just in one country. Rather, they are choosing to list their stock in multiple exchanges in multiple countries.
Read the information in the background material, look for more information, and then write a 3 to 4 page paper answering the following questions:
Provide citations to support your argument and references on a separate page. Please use APA format to provide citations and references
What are the main advantages and disadvantages of listing your company on different stock exchanges in different countries?
Are there any issues involved related to raising capital in the global market? Please provide some examples to support your argument.

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What are the main advantages and disadvantages of listing your company on different stock exchanges in different countries?

The main advantages of raising your company on different stock exchanges in different countries are that the company has access to more investors and greater capital resources. Consider the example of a US based company that is listed only on the NASDAQ. The company has access to US investors. However, if the company is listed on the Hong Kong stock exchange, the French stock exchange, and the UK stock exchange it will have access to more capital. It can raise more equity capital. When a firm issues stocks in countries with strict market regulations and tighter reporting standards than in the home country, they abide by these higher standards and this improves the governance of these firms (WÃ?³jcik. D, 2011). The other advantage is that foreign secondary markets have more liquidity when they raise capital abroad. The effect is that the cumulative benefits translate into lower cost of capital. Most importantly, large firms have large requirements of capital and their local markets make it difficult to raise the capital. In such a situation these companies are compelled to raise capital globally. Different stock exchanges have different rules and regulations, the companies raising capital have the choice of selecting stock exchanges whose rules suit the requirements ...

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Case Assignment Background

Despite the global financial crisis foreign companies tend to find it worthwhile to have their shares listed on one of the American stock exchanges. Having a listing brings access to more capital as well as increased prestige. However, there are many hurdles and difficulties involved in getting a foreign company listed on an American stock exchange.

Do your own research on world stock markets. Discuss the following issues:

1. Is raising money in U.S. stock markets more - or less - difficult than in the rest of the world?

2. Is it generally worthwhile for a non-US company to get listed on a U.S. exchange? What are the advantages? How this is done? What are ADR's?

3. Is it a good move for a U.S. corporation to list its stock on foreign stock exchanges? What are the possible advantages and disadvantages of such a move?


The response should detail the issues facing a foreign company wishing to have its shares listed on an American stock exchange and the advantages/disadvantages of US company wishing to list its shares on another country's stock exchange.

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