38 - What are American Depositary Receipts (ADR's) and why...

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What are American Depositary Receipts (ADR's) and why have they proven so popular with U.S. investors? An American Depository Receipt, or ADR, is a security issued by a U.S. depository bank to domestic buyers as a substitute for direct ownership of stock in foreign companies. An ADR can represent one or more shares, or a fraction of a share, of a non-U.S. company. An ADR is a convenient way for companies whose stock is listed on a foreign exchange to cross-list their stock in the United States and make their stock available for purchase by U.S. investors, as these receipts can be traded on U.S. exchanges. Some ADRs are traded on major stock exchanges such as the Nasdaq Stock Market (NDAQ) and the New York Stock Exchange, which require these foreign companies to conform to the same reporting and accounting standards as U.S. companies. Other ADRs are traded on over-the-counter exchanges that impose fewer listing requirements. United States acquisitions financed by the issuance of American Depository Receipts are
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38 - What are American Depositary Receipts (ADR's) and why...

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