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Questions
State any three features of ADR.
Explain the role of ADRs as sources of finance for Indian industries.
Answer in Brief
Solution
- ADRs are denominated only in US dollars.
- They are issued only to investors who are American residents.
- The depository bank should be located in the US.
- ADRs can be listed on any stock exchange in the USA.
- A single ADR can represent more than one share, e.g., one ADR = ten shares.
- The holders of ADRs have no voting rights.
- The holders of ADRs can get them converted into shares.
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Notes
Students should refer to the answer according to their questions.
American Depository Receipts (ADR)
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