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Question : Case Study: ABC Corporation - Financing Growth Strategies

ABC Corporation, a leading manufacturing company, is looking to finance its growth strategies. The company is exploring various sources of business finance to achieve its expansion goals.

Questions : Debentures and Financial Instruments

How are GDRs and ADRs similar in terms of their purpose?

Option 1: Both represent debt securities
    

Option 2: Both are issued in domestic markets
  

Option 3: Both allow companies to raise funds in their home country

 

Option 4: Both enable companies to raise capital in international markets


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Both enable companies to raise capital in international markets


Solution : The correct answer is (d) Both enable companies to raise capital in international markets

GDRs and ADRs allow companies to access international capital markets by issuing their shares in the form of depository receipts. GDRs are traded outside the United States, and ADRs are traded in the United States. Both serve as instruments to raise capital by attracting investment from international investors and expanding the company's investor base beyond its home country.

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