As a financial analyst, you have been asked to analyse a firm. Your task is to make a recommendation as to whether or not to invest in this firm given the analysis you undertake.

This provides an opportunity to get some practical experience applying corporate finance principles to real firms.

Evaluate the risk profile of the firm, and examine the sources of risk.

Analyse the firms stockholders. What is the breakdown of stockholders in your firm - insiders, individuals and institutional?

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

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

What is this companys current cost of capital?

Examine the firms investment choices.

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

How much cash has the firm accumulated over time? Given this firms characteristics today, how would you recommend that they return cash to stockholders (assuming that they have excess cash)?

How much cash could this firm have returned to its stockholders over the last few years? How much did it actually return?

Given this dividend policy and the current cash balance of this firm, would you push the firm to change its dividend policy (return more or less cash to its owners)?

How does this firms dividend policy compare to those of its peer group and to the rest of the market?

What is companys market value and what is the "key variable" (risk, growth, leverage, profit margins...) driving this value?

If you were hired to enhance value at this firm, what would be the path you would choose?

The firm must be listed on the London Stock Exchange (http://www.londonstockexchange.com/)

Select a firm that has plenty of publicly available information.