CA Inter P6 · Chapter 2 · Question 5 of 7
An Indian company wishes to raise equity from investors in the United States by issuing depository receipts that are listed and traded on a US stock exchange. The instrument it should use is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) American Depository Receipts (ADRs)
Explanation
ADRs are dollar-denominated receipts issued by a US depository bank against the underlying shares of a non-US company and traded in the US market. GDRs are usually listed on European exchanges and offered in several markets. ECBs and FCCBs are debt or quasi-debt instruments, not depository receipts for equity.
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