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Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States.

Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States. Each student should select a different company. Avoid selecting an insurance company or a bank, because the financial ratios for these financial businesses are different. Write a seven-to-eight-page, double-spaced paper answering and demonstrating with calculations and financial data the following questions. 1. What is the name of the company? What is the industry sector? 2. What are the operating risks of the company? 3. What is the financial risk of the company (the debt to total capitalization ratio)? 4. Does the company have any preferred stock? 5. What is the capital structure of the company: short-term portion of long-term debt, long-term debt, preferred stock (if any), and market value of common stock issued and outstanding? 6. What is the companys current actual beta? 7. What would the beta of this company be if it had no long-term debt in its capital structure? 8. What is the companys current marginal tax rate? 9. What is the cost of debt before and after taxes? 10. What is the cost of preferred stock (if any)? 11. What is the cost of equity? 12. What is the cash dividend yield on the common stock? 13. What is the weighted average cost of capital of the company? 14. What is the price earnings multiple of the company? 15. How has the companys stock been performing in the last 5 years? 16. How would you assess the overall risk structure of the company in terms of its operating risks and financial risk (debt to capitalization ratio)? 17. Would you invest in this company? Why or why not? 18. The last page of your paper should be a bibliography of the sources you used to prepare this paper.

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