Question Tag: Corporate Value Maximization

a) Bhim is a not-for-profit non-governmental organization aimed at supporting alleged witches to have an empowered livelihood. The organization is developing a proposal to the Ministry of Gender and Social Protection to secure funding to improve basic healthcare and sanitation at three alleged witches’ camps. They have consulted you to help them develop the section on value for money (VfM) in their proposal.

Required: i) Briefly explain the following value for money concepts:

• Economy
• Efficiency
• Effectiveness
  (6 marks)

ii) Compare and contrast value for money and corporate value maximization.
(4 marks)

b) One of the important sustainability requisites for the accelerated development of an economy is the existence of a dynamic financial market. Financial markets can be found in nearly every nation in the world. Some are very small, with only a few participants, while others, like the New York Stock Exchange (NYSE) and the forex markets, trade trillions of dollars daily.

Required:
What is a financial market?
(1 mark)

c) Explain the difference between the following financial markets:
i) Debt market and Equity market.
(3 marks)
ii) Money market and Capital market
(3 marks)
iii) Forex market and Interbank market
(3 marks)