Equity Investments

Question 1

PIPE

Answer 1

Private investment in a public equity, a public firm that needs capital quickly sells private equity to investors. The investors can often by the stock at a sizeable discount to its market price

Question 2

Integrated markets

Answer 2

when capital flows freely across borders

Question 3

Methods for investing in foreign companies

Answer 3

Buying GDRs (global depository receipts), ADRs, (American Depository Receipts), GRS (Global registered shares), and baskets of listed depository receipts (BLDRs)

Question 4

Depository Receipts

Answer 4

Represent ownership in a foreign firm and are traded in the markets of other countries in local market currencies.

Question 5

Global Depository Receipts

Answer 5

Issued outside the US and the issuers home country. Most GDRs are traded on the London and Luxembourg exchanges. Usually denominated in US dollars

Question 6

American Depository Receipts

Answer 6

Denominated in US dollars and trade in all the US

Question 7

Basket of Listed DRs

Answer 7

An ETF that is a collection of DRs trading in markets like commons stocks

Question 8

Statutory Voting System

Answer 8

If you hold 100 shares, can only choose for one person to get your vote

Question 9

Primary goal of firm management is too ____

Answer 9

increase the book value of the firm’s equity and thereby increase the market value of its equity

Question 10

Porters Five Forces

Answer 10

1. Rivalry among existing competitors
2. Threat of new entrants
3. Threat of substitue
4. Bargaining power of buyers
5. Bargaining power of suppliers