Question : Case Study: XYZ Ltd. - Raising Finance for Expansion
XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.
Questions : Debentures and Financial Instruments
XYZ Ltd. is considering issuing IDR. What does "IDR" stand for?
Option 1: Indian Debt Reserve
Option 2: International Depository Receipt
Option 3: Indian Dividend Ratio
Option 4: International Debt Redemption
Correct Answer:
International Depository Receipt
Solution : The correct answer is (b) International Depository Receipt
An International Depository Receipt (IDR) is a financial instrument denominated in a foreign currency and is offered by a non-resident company outside the country where it is listed. IDRs represent shares of the foreign company and can be traded on international stock exchanges, allowing companies to raise capital from investors in foreign markets.
