23.0k views
3 votes
Define each of the major types of international bond market instruments along with their distinguishing characteristics. Discuss any benefits you can think for a company to (a) cross-list its equity shares on more than one national exchange, and (b) to source new equity capital from foreign investors as well as domestic investors.

1 Answer

4 votes

Final answer:

The major types of international bond market instruments include corporate bonds, government bonds, and long-term certificates of deposit. Cross-listing equity shares on more than one national exchange can enhance a company's visibility and increase its reputation. Sourcing new equity capital from foreign investors brings benefits like diversifying the investor base and accessing additional expertise and resources.

Step-by-step explanation:

The major types of international bond market instruments include corporate bonds, government bonds, and long-term certificates of deposit. Corporate bonds are issued by firms, while government bonds are issued by various levels of government. Long-term certificates of deposit are offered by financial institutions for a specific period of time. Each type of bond has its distinguishing characteristics, such as the issuer, the interest rate, and the time until repayment.

There are several benefits for a company to cross-list its equity shares on more than one national exchange. Firstly, cross-listing can enhance a company's visibility and increase its reputation among international investors. Secondly, it can provide access to a larger investor base, thereby increasing the liquidity of the company's shares. Thirdly, cross-listing can lead to a higher valuation of the company's shares.

Sourcing new equity capital from foreign investors as well as domestic investors can also bring several benefits to a company. Firstly, it can diversify the company's investor base, reducing its dependence on a single market or country. Secondly, it can provide access to additional expertise and resources from foreign investors. Lastly, it can help accelerate the company's growth by accessing larger pools of capital.

User Crellee
by
9.1k points