Discuss in details the role of key corporate governance

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Problem 1: One of the goals of a firm is to maximize the value of the share. Assume that you hold stocks in an XYZ company. The current price per share is AED 40. Another company ABC has just announced that it wants to buy the XYZ Company and will pay AED 48 per share to acquire all the outstanding stock. XYZ Company's management immediately begins fighting off this hostile proposal.

a) Is there any ethical issue involved here? (1)

b) Is the management of XYZ Company acting in the shareholder's best interests? Why or Why not? (2)

c) If you are part of the management team: (5)

a. How would you define the problem accurately?

b. How would you define the problem if are standing on the other side?

c. From where this dilemma is originated?

d. Can you engage the affected parties before making any decision?

e. Can your decision (if you decided to persuade the management to unblock this proposal) hurt anyone?

Problem 2: Discuss in details the role of key corporate governance mechanisms in reducing the information asymmetry and ethical misconduct in the financial markets?

Reference no: EM132594899

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