Question 1. Many companies grant stocks or stock options to the managers. Discuss the benefits and possible costs of using this kind of incentive compensation scheme.
Question 2. It has been shown that foreign companies listed in the U.S. stock exchange are valued more than those from the same countries that are not listed in the U.S. Explain the reasons why U.S. listed foreign firms are valued more than those which are not. Also explain why not every foreign firm wants to list stocks in the United States.
Question 3. Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it to shareholders? Discuss what mechanisms may be used to solve this problem?
Question 4. How are foreign exchange transactions between international banks settled?
Question 5. What is meant by a currency trading at a discount or at a premium in the forward market?
Question 6. Any company seeking to issue securities in the US should face uniform requirements for disclosure. Some assume that more transparency can give rise to competitive disadvantage. Do you agree regarding the disclosure?