Minicase San Pico

San Pico is a quick growing Latin American developing country. The country is blessed with miles of scenic b sepa investlyes that assume attracted tourists by the thousands in saucy-made years to unsanded resort hotels financed by joint ventures of San Pico businessmen and moneymen from the Middle East, Japan, and the join States. Addition every(prenominal)y, San Pico has good natural harbors that are contributory for receiving imported merchandise from abroad and export merchandise produced in San Pico and other environ countries that lack access to the sea.Because of these advantages, many parvenue businesses are being started in San Pico. Presently, extraction-taking is coped in a cramped make in La Cobijio, the nations capital. Admittedly, the San Pico Stock switch over placement is rather archaic. Twice a day an official of the exchange go turn out c altogether out the name of each of the 43 companies whose dividing line trades on the exchange. Brokers wanti ng to buy or switch shares for their clients accordingly attempt to make a trade with one another.This crowd art clay has worked well for over one vitamin C years, but the government desires to replace it with a new modern system that entrust allow greater and more keep going opportunities for trading in each confederation, and pull up stakes allow for trading the shares of the many new start-up companies that are expected to trade in the supplemental market. Additionally, the government administration is rapidly privatizing many state-owned businesses in an attempt to shelter their efficiency, obtain remote exchange from the sale, and change over the country to a more capitalistic economy.The government believes that it would conduct this privatization faster and mayhap at more attractive prices if it had a modern stock exchange knack where the shares of the newly privatized companies will eventually trade. You are an expert in the operation of secondary stock markets and have been retained as a consultant to the San Pico Stock commuting to offer your expertise in modernizing the stock market. What would you advise? Explain. Most new and renovated stock exchanges are being established these old age as either a part or fully automated trading system.A fully automated system is peculiarly beneficial for a small to medium size country in which in that respect is only moderate trading in most issues. Such a system that de works special note is the continuous topic Integrated Market system of newfangled Zealand. This system is fully computerized and does not gather up a physical structure. Essentially all buyers and sellers of a stock enter through with(predicate) their broker into the computer system the enactment of shares they desire to buy or sell and their required exploit price. The system is updated everlastingly as new purchase or sale orders are entered into system.The computer constantly searches for a match between buyer and se ller, and when one is found a transaction takes place. This type of system would apt(predicate) serve San Picos needs very well. there is existing technology to implement, the bugs have been worked out in other countries, and it would satisfy all the demands of the demands of the San Pico government and easily accommodate developing in market activity miniskirt CASE SARA LEE CORP. S EUROBONDS The planetary Finance in Practice boxed in(p) reading in the chapter discussed a three-year $century million Euro stick around issue by Sara lee Corporation.The article also mentions other hamper issues recently placed by mingled foreign divisions of Sara lee(prenominal). What thoughts do you have most Sara lee sides debt financing schema? Suggested Solution to Sara Lee Corp. s Eurobonds Sara Lee is the ideal candidate to issue Eurobonds. The company has worldwide name recognition, and it has an excellent reference work rating that allows it to place new bond issues easily. By iss uing dollar denominated Eurobonds to Swiss investors, Sara Lee can bring new issues to market much more cursorily than if it sold domestic dollar denominated bonds.Moreover, the Eurodollar bonds likely sell at a demean yield than comparable domestic bonds. Additionally, it appears as if Sara Lee is raising funds in a variety of foreign currencies. Sara Lee most likely has large exchange inflows in these same currencies that can be used to meet the debt service obligations on these bond issues. Thus Sara Lee is conclusion a use for some of its foreign currency receipts and does not have to be concerned with the exchange rate uncertainty of these part of its foreign bills inflows.