CFA Level I · CFA Level I Exam · Equity Instrument Features
A foreign company wants to raise capital in a major market by issuing new shares through depository receipts, and is willing to meet the full registration and reporting requirements of that market. The structure most likely to allow it to raise new capital is a:
A Level III program listed on an exchange is the structure most likely to allow the company to raise new capital. It permits a public offering of new shares, with full registration and reporting. Level I and Level II programs only trade existing shares and do not raise capital.
- ALevel I program traded over the counter
- BLevel III program listed on an exchangeCorrect
- CLevel II program listed on an exchange
Explanation
Only a Level III program lets the issuer offer new shares to the public, with the most extensive disclosure. Level I is over the counter with minimal requirements, and Level II lists existing shares on an exchange but does not raise capital.
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