Question

By cross-listing shares on a foreign exchange, you can expect: no share price effect for foreign firms that cross-list on major U.S. exchanges. a positive share price effect for foreign firms that cross-list on major U.S. exchanges. a negative share price effect for foreign firms that cross-list on major U.S. exchanges. none of the above

Answer 1

ANS: Option (A) (no share price effect for foreign firms cross-list on major U.S exchange)

Cross-listing of shares means listing of company's common shares on a different exchange, other than its original sock exchange. Cross-listing enables the companies to trade their shares in various time zones & multiple currencies. It increases the liquidity & raise the share capital of the company. For cross-listing the company must meet the same requirements as the other listed members  of stock exchange; so there is no impact on the share price for the foreign firms. However the stock price gets effected due to market fluctuations or change in the foreign exchange rates.