pick a company to analyze. The company should be publicly traded and have at least one year of trading history and one set of annual financial statements. The company can be listed in any market.
Topics and Key Questions
I. Corporate Governance Analysis Is this a company where there is a separation between management and ownership?
If so, how responsive is management to stockholders?
How does this firm interact with financial markets?
How do markets get information on the firm?
How does this firm view its social obligations and manage its image in society?
II. Stockholder Analysis Who is the average investor in this stock? (Individual or pension fund, taxable or tax-exempt, small or large, domestic or foreign) Who is the marginal investor in this stock?
III. Risk and Return What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)?
How is the risk profile changing?)
What is the performance profile of an investment in this company?
What return would you have earned investing in this company’s stock?
Would you have under or outperformed the market?
How much of the performance can be attributed to management?
How risky is this company’s equity? Why?
What is its cost of equity?
How risky is this company’s debt? What is its cost of debt?
What is this company’s current cost of capital?