Exam 10: Global Capital Markets

According to 2010 data,which of the following statements about the mix of debt and equity to fund operations is true?

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

One way to account for the challenge of the variability of future cash flows is to ________.

What is a Eurodollar?

A bond issued by a Brazilian company in British pounds in London is a ________.

For U.S.MNEs,the tax-deferral privilege operating through a foreign subsidiary was not originally a tax loophole.On the contrary,it was granted by the U.S.government to allow U.S.firms to expand overseas and place them on a par with foreign competitors,which also enjoy similar types of tax deferral and export subsidies of one type or another.

Which of the following is a characteristic of most offshore financial centers?

MNCs can cross-list their common stocks on multiple stock exchanges.

How do countries differ in terms of taxation? In regards to taxation,why do some MNEs turn to offshore financial centers? Why are offshore financial centers a concern to the OECD?

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Which of the following is a true statement about the Euroloan market?

________ is the pricing of goods,services,and technology between related companies.

Subpart F income is passive and usually derived from operations in a tax-haven country.

You are the chief financial officer at an MNE.What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

Which of the following is NOT an advantage of ADRs to U.S.shareholders?

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

All of the following are part of the global financial system except the ________.

Taxation is an important cash flow issue,but it typically does not have a strong impact on the choice of organizational form (such as branch or subsidiary)or the location of an investment.

When Sistema,a Russian company,issued a U.S.dollar stock offering in London,its shares were classified as a(n)________.