Which of the following correctly describes an American Depositary Receipt (ADR)?
Explanation
ADRs enable US investors to hold foreign equities in US dollars and on US exchanges via a depository bank arrangement.
Other questions
Which of the following best describes common shares?
Which feature describes cumulative preference shares?
A convertible preference share primarily provides which benefit to its investor?
Which level of ADR permits a foreign company to raise capital in the US public markets?
Which component is NOT part of an equity security’s total return for a domestic investor?
Why are preference shares typically less risky than common shares?
How is book value of equity computed?
Return on equity (ROE) is best defined as:
Which ratio indicates how the market values a firm relative to its accounting book value?
Which statement about private equity is correct?
When a US investor buys a European-listed share directly, which additional return/loss component should they consider relative to a domestic equity purchase?
Which preference share feature would reduce an investor’s downside exposure most directly?
Which is the most appropriate formula for a company’s total shareholder return when dividends are reinvested?
An investor buys an ADR of a Euro-listed company. The ADR’s local market return (price + dividend) is 10 percent for the year. The euro depreciates by 6 percent versus the investor’s home currency. What is the investor’s approximate home-currency return?
Which statement most accurately describes a key difference between preferred shares and debt?
Which of the following best explains why reinvesting dividends can dramatically increase long-term wealth compared to only capturing capital gains?
In a dual-class share structure where Class A shares provide one vote per share and Class B shares provide no voting rights but more economic upside on liquidation, which statement is most likely correct?
Which of the following is TRUE regarding the book value per share and market price per share?
Which of these is a correct and common implication of a high price-to-book ratio for a company?
Which of the following statements about private equity (PE) transactions is most accurate?
Which of the following most directly increases a company’s book value of equity?
An analyst computes ROE using average book equity in the denominator. Why might the analyst prefer average book equity to beginning-of-year book equity?
Which of the following actions by a firm is most likely to increase its price-to-book ratio, all else equal?
Which of the following is a typical reason companies list ADRs in the United States?
Which of the following most accurately explains why preference shares often yield higher dividend rates than common shares?
Which of the following is NOT a typical reason companies go private via an LBO or MBO?
Which statement about global registered shares (GRS) is correct?
If a company reports net income of 21,308,000 (thousands USD) in 2017 and average shareholders' equity of 65,563,500 (thousands USD) for the year, what is its ROE for 2017 (rounded)?
Which of the following best summarizes why markets outside the US have grown in relative market capitalization compared to world GDP in recent decades?
Which of the following is an accurate implication of a company having negative net working capital (NWC)?
Which of the following best expresses the contribution margin for an operating unit?
Given operating profit formula Operating profit = [Q × (P − VC)] − FC, which action increases operating leverage?
Which statement about callable preferred shares is correct?
Which is the best single measure to compare liquidity and market size across global exchanges?
Which of the following is a typical use of price-to-book ratios in analysis?
Which is the most direct input for estimating a company’s cost of equity using the dividend discount model (DDM)?
Which practice would most likely understate a company’s Return on Equity (ROE)?
Which of these best explains why global depository receipts (GDRs) are often denominated in US dollars?
Which of the following statements about ADR Levels is correct?
Which of the following best captures the relationship between cost of equity and investors' required rate of return?
Which of the following statements about market-to-book differences is true?
In comparing two firms, Firm A has a high ROE driven by high operating margin, while Firm B has a high ROE driven by high asset turnover. Which statement is true?
Which factor is most likely to limit an emerging-market firm's price-to-book ratio relative to global peers?
An investor purchases a non-cumulative preferred share. If the issuer omits dividends in a year, the investor can expect which outcome?
Why might an issuer choose to offer convertible preferred shares in venture financing?
Which of the following is true about baskets of listed depository receipts (BLDRs)?
Which of the following is the primary reason why short-selling restrictions can impede market efficiency?
Which of the following best describes a closed-end fund discount anomaly as discussed in the chapter?
Which practice is most consistent with the idea that fundamental analysts facilitate semi-strong market efficiency?