Topic 1. Financing International Operations: Prada’s Foreign IPO
Most multinational companies (MNCs) secure equity funding in their home countries; however, some may choose a global IPO in which they can simultaneously access equity from multiple countries (Madura, 2015, p. 523). In placing the stock, these MNCs focus on a few countries where they have large subsidiaries that require financing. The MNCs stock is listed on a foreign exchange in the foreign country and is denominated in its local currency allowing investors to trade their stocks there. The local investors will only purchase stocks in a global IPO if the MNC offers a large number of stocks locally as this ensures a more liquid and active local secondary market for the stock, makes trading them easier for the local investors (Madura, 2015).
Based on the required readings and research, discuss:
Sources used in the development of the Prada Mini Case Study (not required reading!):
Daniel, J.D., Radebaugh, L.H., & Sullivan, D. P. (2015).International business(15th ed.). Upper Saddle River, NJ: Pearson Education
Madura, J. (2015).International financial management(12th ed.). Stamford, CT: Cengage Learning
600 words Due 9:00pm today**
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