INVESTIGATION OF AN ENTERPRISE 699 



electric power is due mainly to a reduction in the capital expenses, 

 lower operating costs, and in no less degree to the reduced risk 

 to the investor. By effective safeguards and a well-considered 

 policy of public control the electric securities have become one of 

 the most desirable investments, and there is every indication that 

 efficient public-service regulation will make possible even further 

 reductions in the cost of electric-power production of public-service 

 utilities. 



INVESTIGATION OF AN ENTERPRISE 



The following points cover broadly the important items upon 

 which an investor must have information in order to judge in- 

 telligently of an offering to finance an enterprise, and for a more 

 complete treatise of the subject the reader is referred to Francis 

 Cooper's book, " Financing an Enterprise." 



I. Nature of Enterprise. 



1. Is the basis of the enterprise sound? 



2. Is the business or undertaking profitable elsewhere? 



3. What competition or opposition will be met? 



4. What peculiar advantages does it enjoy over these 



others? 



5. Can it be conducted profitably under existing condi- 



tions? 



II. Plan of Organization. 



1. In what state organized? 



2. What is the capitalization? 



3. Is the capitalization reasonable? 



4. Has the stock been issued in whole or in part and, if 



so, for what? 



5. Is the stock offered for sale full-paid and non-assessable? 



6. Has any of the stock preferences? 



7. Is any of the stock unissued or held in the treasury? 



8. Who has stock control? 



9. Are the rights of smaller stockholders protected? 



10. Are there any unusual features in charter or by-laws? 



III. Present Condition of Enterprise. 



As to Property: 



1. What properties or rights are controlled? 



2. What is their value and how estimated? 



