Difference between revisions of "American depositary receipt"
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Revision as of 01:38, June 20, 2017
An American depositary receipt (ADR) is a mechanism for investing in a foreign company on an American stock exchange, such as the New York Stock Exchange. First introduced in 1927, an ADR has the value on an American exchange which is correlated to the value of its corresponding foreign company or stock.
Investors like ADRs for giving them efficient access to trading in foreign companies. Meanwhile, foreign companies like ADRs for giving them access to American investors.
Examples of foreign companies that trade as ADRs on American exchanges are Toyota and Sony.