Pretend that you are financial managers for TELLUS looking to invest excess cash into securities, which would be a significant investment for a long-term period.

Part 1 - Corporate Governance

In this section, corporate governance will be analyzed more closely in one to two pages. This should include the following:

• What is the composition of the board and the key members?
• Who are the main executives (CEO, CFO, others) and how are they compensated?
• Is compensation structured in a way to reduce agency costs?

Annual reports or the investor relations website of a public company should include details on this.

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Part 2 - Capital Structure

In this part, you will dive deeper into the capital structure of the firm and market performance. It should include, at the minimum, the following:

• Describe the companys equity in detail. Are there one class of common shares or several. Are there preferred shares? How many shares are outstanding?
• Comment and describe the companys current dividend policy/payments as well as share buybacks.
• What is the major debt that the company has? Describe it in detail.
• Estimate the cost of debt based off of information on long-term debt and interest rates in the financial statements.

This part should be 1 to 2 pages.

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Part 3- Market Performance & Valuation

In this section, you will review the performance of the stock over the last several years (3 to 5), comment on its performance, and value the company (with some assumptions). This should include, at a minimum:

• Calculations for market performance, including market-to-book value and price/earnings ratio.
• Comment on the history of the companys stock performance (can relate back to key events in part 1 and their potential impact on stock price).
• Value the company using a dividend discount model (make reasonable assumptions on growth and attempt to calculate the return); comment on your value versus the current stock price.
• Compare the companys value to some of its peers using comparable ratios like price/earnings or market value to book value. Does it indicate if your company is undervalued, overvalued or fairly valued? Please explain.

This part should be 2 to 3 pages. Make sure to include calculations for your valuation.

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Part 4 - Conclusion and Recommendation

In this last part, you are to conclude on your analysis and make a recommendation on the stock, ensuring to answer the following questions:

• Based on your analysis, would you give the stock a buy, hold, or sell recommendation? Explain.
• Would you recommend investing in any of its debt securities that are currently available or if it issued new bonds, assuming your company needed to invest in fixed income?
• What are the biggest risks in your valuation and assumptions that if different than expected, might impact your decision process?