ADRs are considered an effective way for firms to improve the liquidity of their stock, especially if the home market is small and illiquid.

Question

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ADRs (American Depositary Receipts) allow foreign companies to access U.S. capital markets and increase their visibility to American investors. This can positively impact the liquidity of the stock, especially if the company's home market is small and illiquid. Therefore, ADRs are considered an effective way for firms to improve the liquidity of their stock.

ADRs Are Considered an Effective Way for Firms to Improve