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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.

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