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Question 2

Samsung Electronics is a Seoul (South Korea) based diversified electronics giant. It is

doing

very well in within the Asian sub-continent. Samsung Electronics has a desire for aggressive

growth. To achieve this it embarked, over the last 10-years on a two-pronged strategy: product

innovation and efficient production. It commissioned a Market Research Report by Bloomberg

Financial and has recently been provided with a condensed analysis indicating that that Samsung

Electronics’ Asian sub-market is saturated across all segments and it cannot continue capturing

market-share from competition anymore. Samsung Electronics has decided to refocus the

company on the Americas and has decided to launch an audacious bid and have a subsidiary in

5

New York. However, because it invested heavily in innovation and efficiency over the past

decade, Samsung Electronics is constrained of funding at the moment and is considering various

financing options including listing on the New York Stock Exchange. Samsung Electronics has

commissioned research to understand these funding options and has asked you, as a Financial

Consultant to advise the Board.

a) With a clear example, define cross listing and state the four advantages of cross-listing to the

Samsung Electronics Board for Samsung Electronics on the New York Stock Exchange.