Question: Nippon Computer Manufacturing Company (NCM) wants to create a sponsored ADR program, worth $250 million, to trade its shares on NASDAQ. Assume that NCM is

Nippon Computer Manufacturing Company (NCM) wants to create a sponsored ADR program, worth $250 million, to trade its shares on NASDAQ. Assume that NCM is currently selling on the Tokyo Stock Exchange for ¥1,550 per share, and the current dollar/yen exchange rate is $0.008089/¥ or, equivalently, ¥123.62/$. Metropolis Bank and Trust (MBT) is handling the ADR issue for NCM and has advised NCM that the ideal trading price for high-technology shares on the NASDAQ is about $20 per share (or per ADR).

a. Describe the precise steps MBT must take to create an ADR issue that meets NCM’s preferences.

b. Suppose NCM’s stock price rises from ¥1,550 to ¥1650 per share. If the exchange rate does not change, what will happen to NCM’s ADR price?

c. If the yen depreciates from $0.008089/¥ to $0.008050/¥, but the price of NCM’s shares remains unchanged in yen, what will happen to NCM’s ADR price?

Step by Step Solution

★★★★★

3.34 Rating (163 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a MBT will acquire a block of Nippon stock and sell dollar... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

453-B-C-F-L-T-P (443).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

13 Homework (iSomedRequired:If you saved an average of $2,950 each year from your income tax return, $1100 for not buying vendor coffee, and $3,000(saving $250 each paycheck), how much would you have...

A company wants to create a new performance appraisal process for its employees. Discuss how you would execute this directive. Include: How you would select a performance appraisal form. An example...

A company wants to create a new performance appraisal process for its employees. In a two to three page paper that is APA formatted, discuss how you would execute this directive. Include: How you...

A company wants to create a new performance appraisal process for its employees. Discuss how you would execute this directive. Include: 1. How you would select a performance appraisal form. 2. An...

Can you please assist with answering these 6 questions ? No work only answers needed. Thank you 1. Problem 16-1 Hint: (c) The total cost of the issue is simply the difference between the market value...

This text was adapted by The Saylor Foundation under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 1...

Anyone got complete answers to this quiz? 1. 5a_39 In technical analysis, what is a support level for a stock? A. Demand exceeds supply. B. Supply exceeds demand. C. Volume sold equals volume...

Stockholders. use your understanding and knowledge to answer the following questions. 1) There is a conflict of interest between stockholders and managers. In theory, stockholders are expected to...

Please see the attached file. Here are 9 questions and 8 answers. You have to make paraphrase for all 8 answers. Because 8 answers are written by my class mate. Please wire down Q8 answers. I need...

I'm in desperate for help. It's due on next Tuesday midnight. Attached files contain all the requirements of this individual project. I also added some hint on word file and ppt file to mark the...

Need stakeholder analysis, swot analysis and pestle analysis for the below case study- Bella Beverages Inc. 1 Bella Beverages Inc. Overview Bella Beverages Inc. (BB) is a Canadian company traded on...

A person whose mass is 72 kg sits on a piston of a hydraulic lift. The radius of this piston is 0.18 m, while radius of the other piston is 0.019 m. What is the mass of a puppy that sits on the other...

Flash Memory Company can sell all units of computer memory X and Y that it can produce, but it has limited production capacity. It can produce four units of X per hour or six units of Y per hour, and...

3 . Let F ( x , y ) = ( 2 x + yexy, xexy + y 2 ) ( a ) ( 5 points ) Compute a potential function for F ( or explain why no such potential exists ) ( b ) ( 4 points ) Use your answer from part a . to...

Q1-B) Choose 1 OR 2 to answer 1- Convert the Volume flow rate (V") to Weight flow rate (w") 5 cm 8cm 2- Find the area of the triangle below side

2 Fibonacci numbers Show how to compute the nth Fibonacci number using dynamic programming. Use both the recursive method with memoization and the iterative method.

After months of searching for a weekend job, Dant, who is Black, finally got an interview with the owner of a busy car wash and gas station. The owner seemed reluctant to hire him, but Dant managed...

Explain why a polynomial of odd degree at least 1 will always have at least one real root.

Your company sells goods on 29 December 20X3, on sale or return; the final date for return or payment in full is 10 January 20X4. The costs of manufacturing the product are all incurred and paid for...

1. Which of the following statements about due diligence is false? a. It is designed to ensure the legitimacy of securities offered to the public. b. It is designed to ensure that there is no...

In late 2006, Canada Post began issuing permanent stamps. Purchased at the current first-class letter rate ($0.51 at the time), these stamps may be used indefinitely even if the price of stamps...

If the interest rate for non-fraudulent bonds is 12 percent, and chances are that one out of five bonds is fraudulent, what is the interest rate based on a one-year investment and assuming the market...

Linear model theory and estimation with linear restrictions Problem 1 \f\fIf BG = (Bej) and B = (3,), use Theorem 3.6(iv) to prove that var[BG,,] 2 var [Bj]

A SQL statement is a composed of program, commands command, cltuses clause, identifiers sentence, keywords

please form a reply to this student's post for an article discussion board. thank you. **Reply should be engaging and not simply agree with the post. "Posts to classmates' articles should include...