International Business: The New Realities, 5th Edition

Raising Funds for the Firm

1. 10.2 Understand how to raise funds for the firm.

Lufthansa Airlines raised several hundred million euros by issuing stock shares to acquire A380 airplanes from Airbus. Grupo Mexico, a giant producer of copper and silver, issued millions of peso-denominated shares to pay expenses incurred by its foreign subsidiaries. Stanley Works, the U.S. toolmaker, funds part of its Japanese operations by selling shares on the Tokyo Stock Exchange.

Companies can obtain financing in the global money market, the collective of financial markets worldwide where firms and governments raise short-term financing. Alternatively, companies may obtain financing from the global capital market, the collective of financial markets worldwide ...