A share of the ADR of a Dutch firm represents one share of that firm’s stock that is traded on a NYSE stock exchange. The share price of the firm was $15 when the NYSE was closed. As the European market opens, the euro is worth $1.15. Thus, the price of the ADR should be:
€13.04.
€15.00.
€16.50.
€17.25
1 EURO = $1.15
SHARE PRICE = $15
IT MEANS THAT : $1.15 = 1 EURO, THEN $15 =
PRICE IN EURO = 15/1.15 = 13.04 EURO
ANSWER : €13.04 (Thumbs up please
A share of the ADR of a Dutch firm represents one share of that firm’s stock...
The ADR of a British firm is convertible into 3 shares of stock. The share price of the firm was 30 pounds when the British market closed. When the U.S. market opens, the pound is worth $1.63. (a) Calculate the implied market price of the ADR. (b) Suppose the market price of the ADR is, in fact $150. Very Briefly explain how the market can be returned to equilibrium.
Please write a detailed procedure.
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