Describe at Least Two Reasons Why a Corporation May Seek

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The Answer is There are several reasons why a corporation may seek to raise funds outside its domestic market.
First, in some countries, large corporations seeking to raise a substantial amount of funds may have no choice but to obtain financing in either the foreign market sector of another country or the Euromarket. This is because the fund-seeking corporation's domestic market is not fully developed and cannot satisfy its demand for funds on globally competitive terms. Governments of developing countries have used these markets in seeking funds for government-owned corporations that they are privatizing.
The second reason is that there may be opportunities for obtaining a lower cost of funding than is available in the domestic market, although with the integration of capital markets throughout the world, such opportunities have diminished. Nevertheless, there are still some imperfections in capital markets throughout the world that may permit a reduced cost of funds. The causes of these imperfections are discussed throughout the book.
A third reason for using foreign or Euromarkets is a desire by issuers to diversify their source of funding so as to reduce reliance on domestic investors.

Describe at Least Two Reasons Why a Corporation May Seek

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Describe at Least Two Reasons Why a Corporation May Seek

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