Business Commons^™

International Market Segmentation And Euro Debt Issues, Stavros B. Thomadakis, Nilufer Usmen

Department of Accounting and Finance Faculty Scholarship and Creative Works

Implications of capital market segmentation for international capital structure (ICS)-capital structure consisting of equity issued in one country and debt issued in another-are examined. Necessary conditions for the emergence of ICS are analyzed under two options for debt issues (foreign debt and Eurodebt) and comparisons are made. It is shown that in cases where the project cannot support an ICS including foreign debt Eurobonds can be issued and would be profitable.