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A Review of Corporate Financial Policy in Emerging Markets: the Role of Financial Policy

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Submitted By mayorali
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Corporate Financial Policies In Emerging Markets: The Role Of Financial Market Development
Paper by;

Charles Amo-Yartey Joshua Abor

Article Reviewed & Presented by Gabriel Nomotsu Teye- Ali George. E. A Anang Prince Baah Takyi

Outline of Presentation
Definition of Key Terms Introduction Research Problems Methodology Key Findings Study Gaps For Future Research

Research Questions
Literature Review

Conclusion and Remarks

Definition of Key Terms
 Financial markets: This is a market where financial instruments are traded.

 Emerging markets: An emerging market economy (EME) is defined as an economy with low to middle per capita income

 Financial policy: Criteria describing a corporation's choices regarding its debt/equity

mix, currencies of denomination, maturity structure, method of financing investment projects, and hedging decisions with a goal of maximizing the value of the firm to some set of stockholders.

Definition of Key Terms
 Capitalization: The total dollar market value of all of a company's outstanding shares.

 Capital structure: Refers to the way a corporation finances its assets through equity

and long-term debt.

 Financial structure: The structure of a company's sources of financing, including shareholders' equity, long- and short-term debt, and accounts payable.

Research Problem
 The financial markets in emerging markets have undergone considerable growth in recent times, mainly as a result of the trade and financial liberalization policies adopted by these countries over the past decade (Agarwal and Mohtadi, 2004). This development has expanded the financing options available to firms, but raises the important policy question of how financial market development affect the financial policies of these firms.

Research Question
 How does the stock market development affect the Corporate

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