- 20 Marks
FM – MAR 2024 – L2 – Q1 – Introduction to Financial Management | Sources of finance: equity
Discusses the concept of corporate governance, the roles of a company's board of directors, best practices in corporate governance, and methods of raising capital through share issues.
Question
a) The shareholders of Abontim Ghana Ltd, who also serve as the directors of the company, have been informed that good corporate governance is crucial to achieving sustainable financial performance. They want to know more about the concept of corporate governance and what needs to be done to enhance the company’s corporate governance.
Required:
i) Explain the concept of corporate governance.
(2 marks)
ii) Explain TWO (2) roles the company’s board of directors is expected to play in corporate governance.
(4 marks)
iii) Explain TWO (2) corporate governance best practices.
(4 marks)
b) Shanto Ghana Ltd is considering raising capital by issuing shares using the three methods below:
i) Placement method
ii) Offer for sale method
iii) Offer for sale by tender
Required:
Explain each of the above methods citing one advantage each.
(10 marks)
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