What is the name of the company? What is its industry sector?
What are the operating risks of the company?
What is the financial risk of the company (the debt to total capitalization ratio)?
Does the company have any preferred stock?
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?
What is the company’s current actual beta (or equity beta)?
What is the company’s current marginal tax rate?
What is the cost of debt before and after taxes?
What is the cost of preferred stock (if any)?
What is the cost of common stock equity? (Use the Capital Asset Pricing Model.)
What is the weighted average cost of capital of the company?
How has the company’s stock been performing in the last 5 years?
What is the annual cash dividend yield of the common stock?
How would you assess the overall risk structure of the company in terms
of its operating risks and financial risk (debt-to-capitalization ratio)?
Would you invest in this company? Why or why not?
The last page of your paper should be a bibliography of the sources that
you used to prepare this paper.
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