The Impact of Leverage and Economic Development on Corporate Value (Case Study of Anglogold Ashanti Ltd).

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The main object of this study was to unravel the effect of leverage and economic development on corporate value, with AngloGold Ashanti Limited as case study. purely secondary data was used for this study. Thus annual audited financial statements of the company (AngloGold Ashanti Limited) from year 1998 to 2005 served as the main Source of data. Information on certain key financial performance indicators, i.e capital „ "structure (leverage), earnings on equity capital, assets and all the information needed to estimate the performance indices were obtained from these financial records of the company. Major findings of the study indicated that irrespective of the Tabular/Trend Analysis « used, leverage had a negative effect on corporate value. Also Ghana's economic development as measured by GDP growth in the study had a negative relationship with corporate value. Since most of the empirical works in the field were conducted in the developed world using many companies operating in different sectors, the distinctiveness of this work has been brought to bear as it focuses on only one company (AngloGold Ashanti Limited) in a particular sector (mining) in a developing country context. The study was therefore expected to whip up interest in the field of corporate finance and encourage more future research in the "third world" in order to generate bench marks or industry averages to guide corporate managers in this part of our world.
A dissertation presented to the Kwame Nkrumah University of Science & Technology School of Business in partial fulfilment of the requrements for the award of a Master of Business Administration degree, Banking & Finance, 2008