QUESTION 3 Zenith Petrochemicals Plc is a publicly quoted company on the Nigerian Exchange Group (NGX). The company is planning a significant capital restructuring exercise and has engaged Obi & Associates, a firm of chartered accountants, to advise on financial management strategies. During an initial briefing, the following issues were raised by the company's executives: Issue 1: The Chief Executive Officer (CEO) asked the consultants to explain the agency problem that exists in large public companies like Zenith Petrochemicals Plc and how it can be managed. Issue 2: The Chief Financial Officer (CFO) mentioned that the company needs to understand the concept of the time value of money before making its capital restructuring decisions. She specifically wants to know the present value of N5,000,000 receivable at the end of each of the next three years, using a discount rate of 12% per annum. Issue 3: The Head of Treasury raised concerns about the efficiency of the Nigerian capital market and what it means for Zenith Petrochemicals Plc's share pricing. Required: (a) Explain the agency problem as it relates to Zenith Petrochemicals Plc and recommend FOUR mechanisms that can be used to mitigate the agency problem in the company. (12 marks) (b) Explain the concept of the time value of money and calculate the present value of the annuity described by the CFO. (Discount factor for 12%: Year 1 = 0.893; Year 2 = 0.797; Year 3 = 0.712) (8 marks) (c) Explain the THREE forms of the Efficient Market Hypothesis (EMH) and state the implication of each form for Zenith Petrochemicals Plc. (10 marks) (Total: 30 marks)