A GDR is an instrument that a company issues in US dollars in order to collect foreign capital. It is traded on all those foreign stock exchanges where it is listed. For example, the GDRs issued by Reliance Industries (an Indian company) are listed on the New York Stock Exchange. Therefore, these can be purchased and sold only on this stock exchange. The term ‘global’ means the GDRs can be issued in any foreign country. Companies with a good track record issue GDRs.

English

What is GDR?

Questions

What is GDR?

What is meant by Global Depository Receipts (GDRs)?

What are Global Depository Receipts?

Long Answer

Solution

A GDR is an instrument that a company issues in US dollars in order to collect foreign capital.
It is traded on all those foreign stock exchanges where it is listed.
For example, the GDRs issued by Reliance Industries (an Indian company) are listed on the New York Stock Exchange.
Therefore, these can be purchased and sold only on this stock exchange.
The term ‘global’ means the GDRs can be issued in any foreign country.
Companies with a good track record issue GDRs.

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Chapter 18: Sources of Business Finance - EXERCISES [Page 269]