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Assume that the spot rate of the Singapore dollar is .664. The ADR of a Singapore firm is convertible into 3 shares of stock. The price of an ADR is20. What is the share price of the firm in Singapore dollars?

1) 10
2) 13.28
3) 30.12
4) 39.84

User Ross Scott
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1 Answer

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Final answer:

The share price of the Singapore firm's stock in Singapore dollars is approximately SGD 10.05 when converting the ADR price and adjusting for the spot exchange rate.

Step-by-step explanation:

The question pertains to calculating the share price of a Singapore firm's stock based on the given American Depositary Receipt (ADR) price in USD and the spot exchange rate between the US dollar and Singapore dollar. To find the share price in Singapore dollars, we divide the ADR price by the number of shares it is convertible into and then adjust for the exchange rate.

Given the ADR price is $20, and it is convertible into 3 shares, the share price in USD is $20 / 3 = $6.67 per share. With an exchange rate of .664 USD/SGD, we convert the share price to Singapore dollars: $6.67 / 0.664 = approximately SGD 10.05 per share, which is closest to option 1) SGD 10.00.

User Jeffsaracco
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