Scenario: Verandas International
Verandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach to maintain that position.
-If Verandas International chooses to pursue equity financing,but wants to avoid the time and money required to comply with stock exchange regulations,the company would most likely issue ________.
A) American Depository Receipts
B) bills of lading
C) equity shares
D) irrevocable letters of credit

Question

Quizplus · Accepted Answer

By issuing American Depository Receipts (ADRs), Verandas International can raise equity financing from American investors without having to comply with the regulations of the American stock exchange. ADRs are negotiable certificates that represent ownership in a foreign company and are traded on the American stock exchange. This allows Verandas International to raise capital from American investors while still maintaining the flexibility and cost-effectiveness of issuing equity outside the US. The other options, such as bills of lading, equity shares, and irrevocable letters of credit, are not relevant to equity financing.

Scenario: Verandas International Verandas International Is Expanding Its Operations in North America. the North