200 words. Today we find a number of US multinational organizations have listed their stocks and bonds on international exchanges throughout the world. What are some of the risks and benefits from these multiple listings? What are some examples of corporations being listed in specific international exchange markets?
Cross listing of shares is a concept in which firms list there equity in one or more foreign exchange market apart from there domestic exchange market. This is done through instruments named as ADR – American Depository Receipt , EDR- European Depository Receipt, GDR- Global Depository Receipt and GRS Global Registered Shares.
The main loop in cross listing is found in the form of the exchange currency.
Examples of companies who have cross listed there stocks are Royal Dutch Shell, IBM, Siemens etc.
There are few motivations that encourages companies to get into cross listing with there stocks in the multinational market and they are,
It helps in decreasing cost of capital by creating liquidity of the stock in the liquid equity market.
The shares become more accessible to the global investors there by increasing there market capitalization and spreading its name and business.
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