2.The group will 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.

3. Each person will be responsible for doing the entire analysis for the company that he or she has chosen.

4.At the end of the process, the group will write one report for all the firms in the group. In this report, the firms will be compared and contrasted and the results will be presented as a whole rather than as four separate parts.

The Project:

Part 1: Corporate Governance Analysis.

1.Who run the company: Top management, owners.

2.Who monitors: Board of Directors, Regulatory Authorities, Government, Equity investors, Bondholders, Banks, Lenders.

3.Rules of the game: Is it rigged in favor of the incumbent managers? Stock holders have powers?

4.Board Composition: Age and Tenure, Background, Connection to company and CEO.

5.Board Operations: Chairman of the Board, Meeting frequency, Attendance, Able to monitor top managers?

6.Investor Analyst Activity: Buy Side: Biggest stockholders, their history on corporate

7.governance, Sell Side: Who are the analysts that track the firm? What are their views?

8.Activist: Are there any activist investors in the mix? How active are they?

9.Rules of the game: Voting structure, Multiple classes, Golden Shares? Corporate Charter:

10.Takeover clauses (anti takeover amendments), Voting rules (proxies, voting at meeting),

11.Nominating rules.

6. Investor Analyst Activity: Buy Side: Biggest stockholders, their history on corporate governance, Sell Side: Who are the analysts that track the firm? What are their views? Activist: Are there any activist investors in the mix? How active are they?

7. Rules of the game: Voting structure, Multiple classes, Golden Shares? Corporate Charter: Takeover clauses (anti takeover amendments), Voting rules (proxies, voting at meeting), Nominating rules.

Information

oAnnual reports.

oFiling with various regulatory authorities.

oOther online sources.

Part 2: Risk and Return Analysis

How risky is the companys equity? What is its cost of equity?

How risky is the companys debt? What is its cost of debt?

What is companys current cost of capital?

Part 3: Investments

How good are the projects that the company has on its books currently?

Are the projects in the future likely to look like the projects in the past? Why or why not?

Information

i.Annual reports.

ii.Filing with various regulatory authorities.

iii.Other online sources.

Part 2: Risk and Return Analysis

How risky is the company's equity? What is its cost of equity?

How risky is the company's debt? What is its cost of debt?

What is company's current cost of capital?

Part 3: Investments

How good are the projects that the company has on its books currently?

Are the projects in the future likely to look like the projects in the past? Why or why not?

Part 4: Capital Structure Choices

What are the different kinds of financing used by the company to raise funds?

How large, in qualitative/quantitative terms, are the advantages/disadvantages to this company from using debt?

Does your firm have too much or too little debt

oRelative to the sector?

oRelative to the market?

Part 5: Dividend Policy

How has the company returned cash to its owners? Has it paid dividends or bought back shares?

Given your firm's characteristics today, how would you recommend that they return cash to stockholders (assuming they have excess cash)?

Given its dividend policy and the current cash balance would you recommend the firm to change its dividend policy?

Part 6: Valuation

What is the value of equity in this firm? How does this compare to the market value?

What are the key variables driving this value?

Part 7: Summary / Analysis common for all group members