When a Firm Offers Its Stock in a Foreign Market

question 9

Multiple Choice

When a firm offers its stock in a foreign market, it is:

• A) encountering foreign currency exposure.
• B) trying to limit its investor pool.
• C) violating domestic law in the EU or United States.
• D) cross-listing.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, indicating its financial health.

Project

A planned endeavor, typically involving research or design, that is carefully planned to achieve a particular aim.

PI

A mathematical constant approximately equal to 3.14159, representing the ratio of a circle's circumference to its diameter; if the context is finance, PI could refer to Profitability Index, indicating the ratio of payoff to investment for a project.

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment.