Tutorial+21 - BUS3026W Finance II 2009 - Tutorial 21 [No...

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1 BUS3026W Finance II 2009 - Tutorial 21 [No Hand-in Required] QUESTION 1 Discuss any benefits you can think of for a company to (a) cross-list its equity shares on more than one national exchange, and (b) to source new equity capital from foreign investors as well as domestic investors. [4] QUESTION 2 Why do you think the empirical studies about factors affecting equity returns basically showed that domestic factors were more important than international factors, and, secondly, that industrial membership of a firm was of little importance in forecasting the international correlation structure of a set of international stocks? [4] QUESTION 3 On the Milan bourse, Fiat stock closed at EUR14.67 per share on Tuesday, February 26, 2008. Fiat trades as an ADR on the NYSE. One underlying Fiat share equals one ADR. On February 26, the $/EUR spot exchange rate was $1.4889/EUR1.00. a. At this exchange rate, what is the no-arbitrage U.S. dollar price of one ADR?
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Tutorial+21 - BUS3026W Finance II 2009 - Tutorial 21 [No...

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