Governance, Stockholders, and Risk
The course project assignment for this week requires you to research information about your company’s corporate governance, stockholder analysis, and risk and return.
You will find useful information in the following, linked in the Resources:
- Principles of Corporate Finance Companion Web site.
- Yahoo Finance. Type in the stock symbol of your selected company. On the left side, there is valuable information such as Profile, Key Statistics, SEC Filings, Competitors, Industry, Components, Ownership, and Income Statement and Balance Sheet information.
- MSN Money: Type in the name of the stock symbol of your selected company. You can then scroll down and select “Key Statistics” that provides financial ratios for both the firm and the industry. Scroll down further and click “Detailed Statement” and you will be able to see the Income Statement, Balance Sheet, and Cash Flow Data for the past five years.
- SEC Holdings and Forms (EDGAR). At this SEC site, you can download the company’s 10-K.
Use the following questions to guide your research and analysis.
Corporate Governance Analysis
- Is this a company where there is a separation between management and ownership? If so, how responsive is management to stockholders?
- How does this firm interact with financial markets? How do markets get information on the firm?
- How does this firm view its social obligations and manage its image in society?
- Who is the average investor in this stock? (Individual or pension fund, taxable or tax-exempt, small or large, domestic or foreign?)
- Who is the marginal investor in this stock?
Risk and Return
- What is the risk profile of your company? How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)? How is the risk profile changing?
- What is the performance profile of an investment in this company? What return would you have earned investing in this company’s stock? Would you have under or out performed the market? How much of the performance can be attributed to management?
- How risky is this company’s equity? Why? What is its cost of equity?
- How risky is this company’s debt? What is its cost of debt?
- What is this company’s current cost of capital?
- Use the follwoing links below