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Problem 13-22 Portfolio effect of a merger [LO13-5] Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify
Problem 13-22 Portfolio effect of a merger [LO13-5] Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies-a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. a-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (e.g., $100,000 should be entered as ".10"). Round your answers to 3 decimal places.) a-2. Which company is the least risky? Baby food company Treynor Pie Company Nutritional products company Gourmet restaurant
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