Question 5

a) Multinational Corporation MNC sometimes need to raise capital abroad, discuss three pathway strategies for a MNC for raising equity capital outside its home market. (6 marks)

b) Describe how multinational Corporation (MNC) are in a better position than domestic firms to support higher debt ratios. (3 marks)

c) For many U.S investor the American Depositary Receipt (ADR) are a popular investment tool. Although more alternatives for investing in foreign equity securities have become available for U.S. investors in recent years, yet ADRs remain popular. Define what an ADR is and provide at least three examples of the advantages they may hold over alternative foreign investment vehicles for investors. (6 marks)