CFA Practice Question

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CFA Practice Question

Which of the following reasons is LEAST accurate with the respect to why domestically listed firms choose to be listed abroad?
A. Increased liquidity, thus reducing the required rate of return on these shares
B. Reduced reporting requirements in the foreign markets
C. Reduced transaction costs for the issuer's securities in the foreign market
Explanation: Companies generally cross-list in a developed market. This being the case, the reporting requirements are much more stringent in developed markets. Hence, these reporting requirements are not the main reason why more companies cross-list in developed markets.

User Contributed Comments 3

User Comment
gill15 wow...tricky
farhan92 think of it like this the SEC/FCA require information about everything including what your second cousin's brother in laws best friends son had for dinner 3 and half weeks ago. However, in places like Luxembourg things are not as bad (one way to figure this out is trying to find docs about a co or fund on the sec website compared to lux exchange commision website)
GBolt93 Isn't this entirely dependent on where domestically refers to?
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