Empirical evidence shows that additional issues of equity by domestic firms in t

Question

Empirical evidence shows that additional issues of equity by domestic firms in the US market typically have a stock price reaction and additional equity issues in the US markets by foreign firms with segmented domestic markets typically have a_stock price reaction a. Negative; negative b. Positive; negative c. Negative; positive d. Positive; positive is the ability to buy or sell assets (such as a firm's equity) without affecting their price. a. FOREX b. Profitability c. Liquidity d. Time value of money The following statement, "MNEs' marginal cost of capital is constant for considerable ranges in their capital budgets, whereas emerging market domestic firms funded only with domestically sourced capital may suffer a rising marginal cost of capital as their capital budgets increase, is a. True b. False The following statement: "A national securities market is segmented if the required return on securities traded in that market differs from the required return on securities (identical in risk after including political and currency risk) traded in globally integrated markets,"is: a. True b. False A US-based firm with dollar-denominated debt but sales denominated in Japanese yen could manage its risk exposure by: a. Purchasing a forward rate agreement Entering into a swap agreement to pay yen interest and receive dollar interest Purchasing a series of rolling forward contracts to buy yen forward. All of the above. b. c. d. According to our class discussion, the following statement, "When a firm from an emerging market country cross-lists on a US exchange, its home market is negatively impacted. The trading of shares of the cross-listing firm migrates out of its home market and the liquidity of the shares of the other firms that do not cross-list falls" is: a- True b. False

Explanation / Answer

Liquidity is the ability to buy or sell assets (such as firm's equity) without affecting their prices.

FOREX, profitability and time value of money all affect the prices of the assets while buying or selling the asset.

Please post other questions separately. Thanks.

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