Referring to the information presented in problem 3:

a. Explain MegaFon’s principal motivations in raising equity capital in London rather than in Moscow.

b. Is the fact that MegaFon is almost exclusively a Russian and central Asian mobile phone operator a plus or a minus in listing on the London Stock Exchange?

c. As a pension fund manager based in San Francisco (U.S.), would you rather invest in MegaFon’s stock on the Moscow Stock Exchange directly or on the London Stock Exchange through its GDR?

Data from problem 3

On November 28, 2012, MegaFon—the Russian telecom company—raised £1 billion on the London Stock Exchange. The controversial Uzbeck oligarch Alisher Usmanov owns 55. 8 percent of MegaFon, which is the no. 2 Russian mobile phone operator company behind Mobile TeleSystems

(MTS) but ahead of VimpelCom. Both MTS and VimpelCom are listed on the New York Stock Exchange.