Global Equity Markets: The Case of Royal Dutch and Shell Case Solution
Royal Dutch and Shell common stocks are securities with interconnected income, so the ratio of their stock prices should be fixed. The truth is, the ratio is highly variable, moving with the markets where the securities are traded. Royal Dutch commerces more actively in the Netherlands and U.S. marketplaces, whereas Shell trades more actively in the United States.
The result is that the Royal Dutch/Shell comparative price moves absolutely with the Netherlands and U.S. marketplaces and negatively with the U.K. marketplace. The ability to arbitrage these disparities and their causes are major case focal points.
This is just an excerpt. This case is about FINANCE & ACCOUNTING
PUBLICATION DATE: March 04, 1996
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