Firms earnings using respective coefficients of variation

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Reference no: EM131909247

RISK ANALYSIS

Given the following information, calculate the expected value for Firm C's EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10, and σA = $3.60; E(EPSB) = $4.20, and σB = $2.97. Round your answer to two decimal places.

Probability 0.1 0.2 0.4 0.2 0.1

Firm A: EPSA ($1.66) $1.80 $5.10 $8.40 $11.86

Firm B: EPSB (1.20) 1.31 4.20 7.09 9.60

Firm C: EPSC (2.53) 1.35 5.10 8.85 12.73

E(EPSC) = $________

You are given that σc = $4.12. Discuss the relative riskiness of the three firms' earnings using their respective coefficients of variation. Round your answer to two decimal places.

A: ________

B: ________

C: ________

The most risky is:

Reference no: EM131909247

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