...As companies and organizations grow their option to become a publicly traded or public firm is explored. A publicly traded company is one that offers securities in the form of stocks or bonds for sale to the public. It is done through a stock exchange or in an over the counter market. Before a company decides to go public it is known as a private company. The decision to go public is a huge decision that can be taken by any private company. In order to become public however there are criteria to be met and steps to be taken. This paper will highlight those steps as highlighted by the US Securities and Exchange Commission, determine the pros and cons of public firms identify major and minor markets around the world and suggest Caribbean companies that can explore becoming public companies. One of the first steps is the decision to go public. Shareholders, investors and owners of the company must agree to the decision to go public by taking the necessary votes required to do so. This can be done through a shareholders’ meeting where the relevant decisions can be made by the owners of the private stock. The firm also needs to ensure there are no discrepancies on its books and that they are aligned with the accepted principles of accounting. The firm’s lawyers and auditors must ensure that documents are legitimate. By doing so time and money can be saved in the future because corrections and certification would have been completed and documents certified correct...
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...publicly traded with shares listed on the Frankfurt Stock Exchange. Brewing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water.While the malt, yeast, and water are obtained locally, Besserbrau imports hops from a company locatedin the Czech Republic. Czech hops are considered to be among the world’s finest.Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of apotentially enormous market for its products and expand sales, Besserbrau began making sales in thePeople’s Republic of China three years ago. The company established a wholly-owned subsidiary inChina (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recentyear, sales to BB Pijio accounted for 20% of Besserbrau’s sales and BB Pijio’s sales to customer in China accounted for 10% of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expended so rapidly and the potential for continued sales growth is so great that thecompany recently broke ground for the construction of a brewery in Shanghai, China. To finance construction of the new brewery, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock. Required: Discuss the various international accounting issues confronted by Besserbrau AG. 1. Sales foreign...
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...finance 1. Corporate governance 4. Corporate governance 5. Compensation of member of the Board of Directors 6. Investor relation section 2. Stock price data and analysis 7. Daily stock prices 8. Comparison with market and sector indexes 9. Dividends policy 10. Investment magazines reports 11. Five selected new facts 3. Financial information 12. Capital structure 13. Liquidity and solvency analysis 14. Beta coefficient and cost of equity 15. Discounted cash flow analysis and implication of fundings 4. Recommendation ------------------------------------------------- 1. COMPANY PROFILE 1.1 Core activities MISSION: "To be the leading international airlines group in future industry consolidation on a regional and a global scale" International Airlines Group (IAG) is one of the world's largest airline groups: with 377 aircraft and an average of 69 million passengers each year flying to 230 different destinations, IAG is the third- largest based in Europe and the sixth in the world. Formed in January 2011 as a result of the merger between British Airways and Iberia, it is a Spanish registered company whose shares are traded on the London and Spanish Stock Exchanges and with its head office in London (UK). Active in the airlines and transportation service sector, IAG is also a major conveyors of air - cargo serving 350 destinations across 80 countries. Following the...
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...the New York Stock and Exchange Board--as the New York Stock Exchange was then called--traded a grand total of 31 shares. But the Civil War changed everything. As the national debt soared from $65 million to $2.7 billion, and as the economy expanded enormously to meet wartime needs, Wall Street exploded in size. By 1865 it was second only to London. But regulation was almost nonexistent. New exchanges had sprung to meet the hugely increased trading, and the curb market operated on Broad Street with no regulation whatever. Worse, New York state and city governments were utterly corrupt; an English magazine of the time reported that "in New York there is a custom among litigants as peculiar to that city, it is to be hoped, as it is supreme within it, of retaining a judge as well as a lawyer." When Cornelius Vanderbilt tried to buy enough common stock in the Erie Railway to control the company, members of the Erie board just started printing more and more of it. "If this printing press don't break down," one of the directors said, "I'll be damned if I don't give the old hog all he wants of Erie." The directors turned the proceeds into cash, and when Vanderbilt had his judge issue arrest warrants, they fled to New Jersey with $7 million of the Commodore's money in a carpet bag. Vanderbilt soon compromised with the Erie board, but Wall Street brokers realized this was no way to run a capital market. When the Open Board of Brokers merged in 1869 with the New York Stock...
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...Case 1-1 Besserbrau AG Discuss the various international accounting issues confronted by Besserbrau AG. 1. Foreign Direct Investment (FDI) With all of the rapid growth and expansion into China, Besserbrau AG must account for FDI. In order to do this they must adapt their accounting standards to meet the requirements in China. They will need to convert profits made by their subsidiary, BB Pijio from Chinese GAAP to German GAAP. Then it will be important for them be able to translate the profits between the two currencies and more importantly the overall performance of BB Pijio. With FDI in China, Besserbrau AG will be taxed by both the German government and Chinese government on income earned. The goal here is to minimize the total amount of taxes incurred so they are able to maximize after tax cash flows. It will be important for Besserbrau to avoid double taxation. Many countries provide relief through a credit for taxes that may have already been paid to the foreign government. 2. Sales to Foreign Customers Besserbrau AG exports their products to China. So the problem that arises is that both countries have a different currency. To account for their export sales, the Chinese Yuan sale and receivable must be translated into German Euros. 3. Hedges of Foreign Exchange Risk A way Besserbrau AG could reduce their exposure to foreign exchange risk would be to set the requirement that all foreign customers must pay for products in Euros. Another way is by purchasing...
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...Outline I. International accounting is an extremely broad topic. A. At a minimum it focuses on the accounting issues unique to multinational corporations, especially with respect to foreign operations. B. At the other extreme it encompasses the study of the various functional areas of accounting in all countries of the world, as well as the activities of a number of supranational organizations. C. This book provides an overview of the broadly defined area of international accounting, with a focus on the accounting issues encountered by multinational companies engaged in international trade and invested in foreign operations. II. There are several accounting issues encountered by companies involved in international trade. A. One issue is the accounting for foreign currency-denominated export sales and import purchases. An important issue is how to account for changes in the value of the foreign currency-denominated account receivable (payable) that occur as exchange rates fluctuate. B. A related issue is the accounting for derivative financial instruments, such as forward contracts and foreign currency options, used to hedge the foreign exchange risk associated with foreign currency transactions. III. There is an even greater number of accounting issues encountered by companies that have made a direct investment in a foreign operation. These issues primarily result from the fact that GAAP, tax laws, and other regulations differ across countries. A. Figuring...
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...Case 1-1 Besserbrau AG Discuss the various international accounting issues confronted by Besserbrau AG. 1. Foreign Direct Investment (FDI) With all of the rapid growth and expansion into China, Besserbrau AG must account for FDI. In order to do this they must adapt their accounting standards to meet the requirements in China. They will need to convert profits made by their subsidiary, BB Pijio from Chinese GAAP to German GAAP. Then it will be important for them be able to translate the profits between the two currencies and more importantly the overall performance of BB Pijio. With FDI in China, Besserbrau AG will be taxed by both the German government and Chinese government on income earned. The goal here is to minimize the total amount of taxes incurred so they are able to maximize after tax cash flows. It will be important for Besserbrau to avoid double taxation. Many countries provide relief through a credit for taxes that may have already been paid to the foreign government. 2. Sales to Foreign Customers Besserbrau AG exports their products to China. So the problem that arises is that both countries have a different currency. To account for their export sales, the Chinese Yuan sale and receivable must be translated into German Euros. 3. Hedges of Foreign Exchange Risk A way Besserbrau AG could reduce their exposure to foreign exchange risk would be to set the requirement that all foreign customers must pay for products in Euros. Another way is by purchasing...
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...operational entities are a 60/40 owned by the two holding vehicles. The equity listings of the companies I am familiar with are more like a merger of two companies. In a merger, both companies would become one sharing everything that they own. The two listed organizations have entered into profitsharing agreements with each other, and equalizationratios exist to keep the economic performances of the two stocks linked to each other. ADRs: An ADR is an American Depository Receipt which is a stock that trades in the United States but represents a specified number of shares in a foreign corporation. ADRs are bought and sold just like stocks through a bank or brokerage. Investors usually find it more convenient to own an ADR since ADRs allow easy comparison to securities of similar companies as well as access to price and trading information. Companies may find it attractive to issue ADRs if they want a significant amount of investors in a foreign market. ADRs are common among large corporations and allow companies to offer their stock without being listed on the U.S. stock exchange. ADRs are a way for company to...
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...Outline I. International accounting is an extremely broad topic. A. At a minimum it focuses on the accounting issues unique to multinational corporations, especially with respect to foreign operations. B. At the other extreme it encompasses the study of the various functional areas of accounting in all countries of the world, as well as the activities of a number of supranational organizations. C. This book provides an overview of the broadly defined area of international accounting, with a focus on the accounting issues encountered by multinational companies engaged in international trade and invested in foreign operations. II. There are several accounting issues encountered by companies involved in international trade. A. One issue is the accounting for foreign currency-denominated export sales and import purchases. An important issue is how to account for changes in the value of the foreign currency-denominated account receivable (payable) that occur as exchange rates fluctuate. B. A related issue is the accounting for derivative financial instruments, such as forward contracts and foreign currency options, used to hedge the foreign exchange risk associated with foreign currency transactions. III. There is an even greater number of accounting issues encountered by companies that have made a direct investment in a foreign operation. These issues primarily result from the fact that GAAP, tax laws, and other regulations differ across countries. A. Figuring...
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...STOCK EXCHANGES IN INDIA Module Objectives The main objective of this module is to explain the structure of organized exchanges for trading in stocks, commodities and derivatives. The features of derivative instruments like forwards, futures, options and swaps are also described. Module Contents 5.1. Stock Exchanges 5.2. Commodity Exchanges 5.3. Derivatives 5.4. Currency Futures in India 5.1 Stock Exchanges in India 5.1.1 History and Development Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for...
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...American Economic Association The Early History of the London Stock Exchange Author(s): C. F. Smith Reviewed work(s): Source: The American Economic Review, Vol. 19, No. 2 (Jun., 1929), pp. 206-216 Published by: American Economic Association Stable URL: http://www.jstor.org/stable/1807309 . Accessed: 06/06/2012 04:11 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The American Economic Review. http://www.jstor.org THE EARLY HISTORY OF THE LONDON STOCK EXCHANGE Though the Stock Exchange, as a definitely organized body, was not founded until 1773, it had been in existence in the sense of a continuous and organized market for dealing in securities for about a century before that date. Like so many British economic institutions it owed nothing to deliberate creative action by the government, but it developed autonomously to meet the needs which the progress of industry and finance were creating. The increase in the amount of...
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...foreign monetary system. The British system is one that is much like ours, yet it has existed a lot longer, and is just as complex. The core focus of this investigation is to learn the history of Britain’s monetary system, scrutinize its major components and significant influences, learn about its financial organizations, and reveal incidents that helped form its current system. The history of Britain’s monetary system stretches back through the centuries. In the 1640’s many people wanted to keep their gold safe, so they entrusted their wealth to goldsmiths. In exchange for the gold, people would receive “promissory notes” which entitled the bearer to the full amount in gold. This was far easier to carry around than heavy bags of coins, and they became very popular and were soon used as currency. When the goldsmiths realized that almost no one was redeeming their notes for gold, they started to issue more notes than the gold they had to back them, thereby creating money. This creation of money went on for a few decades with no one the wiser until it was officially authorized. “In 1694 the practice of creating money was legitimized with the founding of the Bank of England”. (Chown, 1997) Not long...
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...INTERNATIONAL FINANCIAL MARKETS Topic 1 THE STRUCTURE OF THE INTERNATIONAL FINANCIAL SYSTEM Agenda Recent developments in international financial markets The components of the international financial market The eurocurrency market The international equity market The international debt market The foreign exchange (currency) market Globalisation of financial markets The global economy has undergone through a number of structural changes in the past few decades: Real changes liberalization of product and factor markets, allied with technological developments increased output in many countries and particularly in the previously centrally planned economies Monetary changes a global commitment to maintain low rates of inflation after the boost in inflation in the ’70s Financial changes growing completeness and integration of world financial markets, fueled by deregulation and technology 3 Globalisation of financial markets Realities of global financial markets: Short-term nature of capital flows High turnover in financial markets Multiplicity of agents High number and complexity of instruments High speed with which market participants react to new information Global reach of financial institutions Implications: Growing integration of financial markets, including emerging markets Better financing of current account deficits Financial contagion risks 4 How developed are the world’s...
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...e i n f o Article history: Received 30 June 2011 Received in revised form 6 August 2012 Accepted 7 August 2012 Available online 17 August 2012 JEL classification: F30 G15 G32 G38 Keywords: Cross-listing Stocks Bonding International financial markets a b s t r a c t Why firms from around the world seek to cross-list their shares on overseas exchanges has intrigued scholars during the past two decades. A general dissatisfaction with the conventional wisdom about investment barriers segmenting global investors and how cross-listings overcome those barriers cleared the way for newer wisdom about informational problems and agency conflicts, and how firms could overcome weaknesses in corporate governance by listing on, and thus “bonding” to, overseas markets with stronger regulatory oversight, stringent reporting and disclosure requirements and investor protections. Critics have challenged the viability of the bonding hypothesis, which I answer in this review. © 2012 Elsevier B.V. All rights reserved. 1. Introduction Cross-listing — also referred to as “dual-listing,” “international listing,” or even “inter-listing,” — is usually a strategic choice made by a firm to secondarily list its equity shares trading in a home market exchange on a new overseas market. It may or may not involve an initial or secondary capital-raising and it ☆ An early version of this paper was presented as the keynote address at the 4th Singapore...
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...has grown so rapidly over the last quarter century. • Be familiar with the risks associated with the globalization of capital markets. • Appreciate the risks and benefits associated with the Eurocurrency market, the global bond market, and the global equity markets. • Understand how foreign exchange risk impacts upon the cost of capital. This chapter discusses the form and function of the global capital market. The market is attractive because its size lowers the cost of capital for borrowers, and allows investors to diversify their portfolios, thereby reducing their risk. Advances in information technology, and the deregulation of financial services and the relaxation of regulations on cross-border capital flows have contributed to the growth of the global capital market. The chapter then goes on to explore the Eurocurrency market, the global bond market, and the international equities market. The opening case describes how ICBC, China’s largest bank, raised $21 billion in the international equities market. The closing case examines how China Mobile raised capital in international markets through a stock offering and a bond issue. OUTLINE OF CHAPTER 11: THE GLOBAL CAPITAL MARKET Opening Case: Industrial and Commercial Bank of China Introduction Benefits of the Global Capital Market Functions of a Generic Capital Market Attractions of the Global Capital Market The Borrower’s Perspective:...
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