An extensive study by Karolyi (1996) reports: (i) the share price reacts favorably to cross-border listings. (ii) the total postlisting trading volume increases on average, and, for many issues, home-market trading volume also increases (iii) liquidity of trading in shares improves overall (iv) the stock’s exposure to domestic market risk is significantly reduced and is associated with only a small increase in global market risk (v) cross-border listings resulted in a net reduction in the cost of equity capital of 114 basis points on average (vi) stringent disclosure requirements are the greatest impediment to cross-border listings (i), (ii), and (iii). (iii), (iv), and (v) (iv), (v), and (vi) (i), (ii), (iii), (iv), (v), and (vi)

An extensive study by Karolyi (1996) reports: (i) the share price reacts favorably to cross-border listings. (ii) the total postlisting trading volume increases on average, and, for many issues, home-market trading volume also increases (iii) liquidity of trading in shares improves overall (iv) the stock’s exposure to domestic market risk is significantly reduced and is associated with only a small increase in global market risk (v) cross-border listings resulted in a net reduction in the cost of equity capital of 114 basis points on average (vi) stringent disclosure requirements are the greatest impediment to cross-border listings (i), (ii), and (iii). (iii), (iv), and (v) (iv), (v), and (vi) (i), (ii), (iii), (iv), (v), and (vi)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 9QTD

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