1.

What is Global Depository Receipts? Write its advantages.

Answer»

Global Depository Receipt (GDR) is an instrument in which a company located in domestic country issues one or more of its shares or convertibles bonds outside the domestic country.

Advantages of Global depository receipts are :

  • GDR provides access to foreign capital markets.
  • A company can get itself registered on an overseas stock exchange or over the counter and its shares can be traded in more than one currency.
  • GDR expands the global presence of the company which helps in getting international attention and coverage.
  • GDR are liquid in nature as they are based on demand and supply which can be regulated.
  • The valuation of shares in the domestic market increase, on listing in the international market.
  • GDR can be freely transferred.


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