Why might firms consider issuing stock in foreign countries

Why might firms consider issuing stock in foreign countries? Why might U.S. businesses look to issue more stock in Europe since the adoption of the euro (implemented in 1999)?

Solution

Firms may issue stock in foreign markets when they are concerned that their homemarket may be unable to absorb the entire issue. In addition, these firms may have foreigncurrency inflows in the foreign country that can be used to pay dividends on foreign-issued stock.They may also desire to enhance their global image. Since the euro can be used in severalcountries, firms may need a large amount of euros if they are expanding across Europe.