International capital structure

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)

The topic of this article may not meet Wikipedia's general notability guideline. Please help to demonstrate the notability of the topic by citing reliable secondary sources that are independent of the topic and provide significant coverage of it beyond a mere trivial mention. If notability cannot be shown, the article is likely to be merged, redirected, or deleted.
Find sources: "International capital structure" – news · newspapers · books · scholar · JSTOR (February 2017) (Learn how and when to remove this template message)

|

This article relies largely or entirely on a single source. Please help improve this article by introducing citations to additional sources.
Find sources: "International capital structure" – news · newspapers · books · scholar · JSTOR (February 2017)

|

This article is an orphan, as no other articles link to it. Please introduce links to this page from related articles; try the Find link tool for suggestions. (October 2016)

|

(Learn how and when to remove this template message)

Many major firms throughout the world have begun to internationalize their capital structure by raising funds from foreign as well as domestic sources. As a result, these corporations are becoming multinational not only in the scope of their business activities but also in their capital structure.[1]

## Contents

* 1 Benefits
* 2 Prospect
* 3 Examples
* 4 References

## Benefits[edit]

By internationalizing its corporate ownership structure, a firm can generally increase its share price and lower its cost of capital. This trend reflects the ongoing liberalization and deregulation of international financial markets that make them accessible for many firms.[1]

As discussed in different theories, cross-listing of a firm's shares on foreign stock exchanges is one way a firm operating in a segmented capital market can lessen the negative effects of segmentation and also internationalize the firm's capital structure.[1]

## Prospect[edit]

If international financial markets were completely integrated, it would not matter whether firms raised capital from domestic or foreign sources because the cost of capital would be similar across countries. If, on the other hand, these markets are less than fully integrated, firms may be able to create value for their shareholders by issuing securities in foreign as well as domestic markets.[1]

## Examples[edit]

For example, IBM, Honda Motor, and British Petroleum are simultaneously listed and traded on the New York, London, and Tokyo stock exchanges.[1]

## References[edit]

1. ^ a b c d e Cheol S., Eun; Bruce G., Resnick (2013). International Financial Management, 6th Edition. Beijing, China: The McGraw-Hill Companies, Inc., China Machine Press. p. 429\. ISBN 9787111408543.