Does Corporate Governance Score Affect Stock Price? Evidence from a Developing Country
Keywords:corporate governance, stock price, CEO duality, independent directors
Corporate governance has received significant attention in recent years, mainly due to the numerous corporate collapses and accounting fraud at the executive level of management. The benefits of an effective corporate governance structure are well documented, ranging from reduce cost of capital to improved transparency in ethics, morality and financial disclosure. Well- managed companies should therefore produce better financial results which ultimately should result in better returns for investors. This study investigates the effect of corporate governance on stock prices. The results showed that stock prices are affected by a company’s corporate governance structure which is in line with the literature that argues that better managed/governed companies are able to access finance at lower cost.
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