Covington Co. is a large U.S.-based MNC with large subsidiaries in France. It has issued stock in France in order to establish its business. It could have issued stock in the U.S. and then used the proceeds in order to support the growth in Europe.

• What is a possible advantage of issuing the stock in France to finance French operations?
• Why might the French investors prefer to purchase the stock that was issued in France rather than purchase the stock of Covington on a U.S. stock exchange?