American depository receipts concept
1 answersQuestion asked ( August 19, 2009 , Shopping / Finance )
I’m an indian national and i currently live in the united states. I’m wondering if it may be a smart idea to invest in american depositary receipts. Does anyone know how adr’s work?
Answers to : receipts...
Answer
The depositary receipts are denominated in US dollar. They are issued in the United States by a depositary bank. American Depositary receipts represent the ownership in the equity of non-US organizations. The dividends to the shareholder are paid in US dollars. Once ADRs are issued in the stock exchange, they trade in the similar way as other shares. ADRs help overseas investors to invest in the ordinary shares of foreign organizations in their own domestic market. ADRs were introduced in 1927 as a result of legislation in United Kingdom.
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