Should foreign subsidiaries of multinational firms conform to the capital structure norms of the host country, or to the norms of their parent’s country? Discuss.
Answer to relevant Questionsa. ADRs. b. GRSs. c. Sponsored depositary receipts. d. Unsponsored depositary receipts. Give five reasons why a firm might cross-list and sell its shares on a very liquid stock exchange. UNIBANCO estimated the weighted average cost of capital for Petrobrás to be 13.2% in Brazilian reais in August of 2004. Evaluate the methodology and assumptions used in the calculation. Why do the U.S. tax authorities tax passive income generated offshore differently from active income? How does the diversification of a portfolio change its expected returns and expected risks? Is this in principle any different for internationally diversified portfolios?
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