Costco Whole sale MNC

Antonia Davis

Week 1 Homework & Lecture Notes

Question: Why might a company be interested in investing in an operation in a foreign country (foreign direct investment)?

There are several reasons why a company might want to invest in foreign markets. Investing in rapidly growing markets could lead to increased sales and revenues. The costs of doing business could be less in these foreign markets. Companies could see an investment in a foreign market as protecting their domestic market or protecting a foreign market. Finally, investing in a foreign market could lead to new technological developments or new ways of conducting business.

The New York Stock Exchange (NYSE) provides a list of non-U.S. companies listed on the exchange on its Web site (www.nyse.com). (Hint: Search the internet for “NYSE List of Non-U.S. Listed Issuers.”)

Required:

a) Determine the number of foreign companies listed on the NYSE and the number of countries they represent.

There are about 508 New York Stock Exchange as well as NYSE MKT non United States companies which are listed in the NYSE; these foreign companies represent Issuers from 46 Countries.

b) Determine the five countries with the largest number of foreign companies listed on the NYSE.

Five countries with the largest number of foreign companies which are listed on the NYSE include, CANADA 132 non-ADR issuers, CHINA 63ADR &16 NON-ADR ISSUERS, UNITED KINGDOM 24 common ADR, 16 non-ADR & 1 preferred ADR issuers, BRAZIL 31 & 4 non-DR issuers and BEMUDA 19 non-ADR & 2 preferred issuers.

c) Speculate as to why non-U.S. companies have gone to the effort to have their shares listed on the NYSE.

Non-United States companies have actually made an effort of going a notch higher to have their shares listed on the NYSE mostly due to the fact that the NYSE is bullish and as such it tends to trade the highest number of shares, it also has an immense access to the wider European markets.

Assignment Question:

Some have advocated that a single widely spoken language be designated as the formal international accounting language. What language would you select and write a one-paragraph statement supporting your choice.

English is already the leading language of global business. It’s the fastest spreading language in human history and is spoken by 1.75 billion people worldwide. There are about 385 million native speakers, a billion fluent speakers in formerly colonized nations, and millions that have learned English as a second language. In addition it is used by 565 million people on the internet. If foreign companies want to do business in the U.S. or many other countries around the world, English is going to be their best bet.

Exercise: Take a look at your adopted MNC …in what countries does it do business. Then identify if those countries are common law, code law or bi-juridical (civil and common). Finally select one of the environmental factors listed below and in a short paragraph relate it to your MNC.

Environmental Factors

 Cultural

 Economic

 Legal

 Political

United States Common

Canada Common

Mexico Civil

United Kingdom Common

Japan Civil

South Korea Civil

Taiwan Civil

Australia Common

Spain Civil

France Civil

Economic factors can adversely affect Costco’s business, financial condition, and results of operations. Higher energy and gasoline costs, inflation, levels of unemployment, healthcare costs, consumer debt levels, foreign currency exchange rates, unsettled financial markets, weaknesses in housing and real estate markets, reduced consumer confidence, changes related to government fiscal and tax policies, sovereign debt crises, and other economic factors could adversely affect demand for their products and services or require a change in the mix of products they sell. Prices of certain commodity products, including gasoline and other food products, are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, taxes and periodic delays in delivery. Rapid and significant changes in commodity prices may affect Costco’s sales and profit margins. These factors could also increase their merchandise costs and selling, general and administrative expenses, and otherwise adversely affect their operations and financial results.

INVESTOR RELATIONS OVERVIEW. (n.d.). Retrieved January 7th, 2021, from Costco Wholesale Corporation website: https://investor.costco.com

‌