- •Deutsche Telekom Taps the Global Capital Market
- •Introduction
- •Figure 11.1
- •The Investor's Perspective: Portfolio Diversification
- •Information Technology
- •Deregulation
- •Figure 11.7
- •Global Capital Market Risks
- •The Eurocurrency Market
- •Genesis and Growth of the Market
- •Attractions of the Eurocurrency Market
- •Figure 11.8
- •Interest Rate Spreads in Domestic and Eurocurrency Markets
- •Drawbacks of the Eurocurrency Market
- •The Global Bond Market
- •Favorable Tax Status
- •The Global Equity Market
- •Foreign Exchange Risk and the Cost of Capital
- •Implications for Business
- •Case Discussion Questions
Case Discussion Questions
What are the causes and likely consequences of the capital shortage faced by Czech firms? How does the capital shortage affect the cost of capital in the Czech Republic?
How will selling equity to foreign investors benefit Czech firms and the Czech economy? What would happen to the Czech economy if Czech firms were prohibited from accessing the global capital market? Can you see any drawbacks with the strategy of selling equity to foreign investors?
Why is it easier for Czech firms to execute an IPO in London than in Prague?
If Czech firms continue to raise capital through foreign equity issues, ultimately more than 50 percent of the equity of these firms will be owned by investors based outside the Czech republic. If and when this occurs, will these still be Czech firms?