Company share valuation: the cases of Atwima Kwanwoma Rural Bank Ltd. & Okomfo Anokye Rural Bank Ltd.

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Pricing is a key factor in the sourcing of long-term funds. It is a very major aspect of the valuation of stock. Stock price is determined primarily by demand and supply. Individual stock prices generally rise and fall in concert with collective expectations for each firm’s profit. This study examines the various values and the corresponding prices per share of the two rural banks viz Atwima Kwanwoma Rural Bank and Okomfo Anokye Rural Bank using three methods or approaches of stock valuation. The various values obtained from different methods were weighted to arrive at the weighted market values of the banks. The banks’ goodwill were also determined. The overall market value of each bank was obtained from addition of the weighted market value and the goodwill. The major theories that constitute the framework for the study include the fundamentalist’s approach to stock valuation, the Discounted Cashflow valuation, Asset Based and Earning approaches to valuation. Others include the Profit Opportunity Approach, Bank Valuation, Market Comparables and Financial Statement Interpretation. It is hoped that the findings of the study shall be useful to Board of Directors and management of rural banks, researchers and the general public.
A thesis submitted to the Department of Economics & Industrial management, in partial fulfilment of the requirements for the award of degree in Masters of Business Administration in Industrial Management, 2005