Chapter 17 Multinational Financial Management 553Source: Adapted from Yahoo Finance historical quotes obtained from the web site at http://" nance.yahoo.com.
1/95 1/96 1/97 1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07300Relative
Value (%)250IndiaGermanyUnited StatesGreat BritainJapan200150100500–50–100Selected International Stock Indices—Compound Returns Since January 1995
“bulldogs” are foreign bonds issued in London, and “samurai bonds” are foreign
bonds issued in Tokyo. Foreign bonds can have a! xed-rate coupon or a " oating-
rate coupon, and they have the same maturities as the purely domestic bonds with
which they must compete for funds.
17-9b International Stock Markets
New issues of stock are sold in international markets for a variety of reasons. For
example, a Turkish! rm might sell an equity issue in the United States because it can
tap a much larger source of capital than in its home country. Also, a U.S.! rm might
tap the Turkish market because it wants to create an equity market presence to accom-
pany its operations in that country. Occasionally, large multinational companies also
issue new stock simultaneously in multiple countries. For example, Alcan Aluminum,
a Canadian company, simultaneously issued new stock in Canada, Europe, and the
United States using different underwriting syndicates in each market.
In addition to new issues, outstanding stocks of large multinational companies
are occasionally listed on several international exchanges. For example, Coca- Cola’s
stock is traded on six stock exchanges in the United States, four exchanges in
Switzerland, and the Frankfurt exchange in Germany. Some 500 foreign stocks are