The valuation of common stock is usually conducted in several steps. A company belongs to a global industry and is based in a country; hence, country and industry analysis are necessary. Companies compete against global players within their industry, so studying a company within its global industry is the primary approach to stock valuation.

Companies tend to favor some countries in their business activities. They target some countries for their sales and base their production in only a few countries.

To achieve excess equity returns on a risk-adjusted basis, an investor must find companies that can earn a return on equity above the required rate of return and do this on a sustained basis.

Questions:

What elements should be looking at when conducting a company analysis in a global setting.

What economic, social and political variables should be considered in the country analysis and why?

What key elements should be considered in the valuation of a company within its global industry analysis and why?