Problem 6

Intro The earnings per share (EPS) for firm C are given below for various scenarios:

Probability EPSC 0.3 -3.5 0.4 4.2 0.3 9.1

Data for Firms A and B are as follows: E(EPSA) = $5.5 and A = $3.72, E(EPSB) = $4.5 and B = $3.49. Attempt 1/5 for 10 pts.

Part 1 What is the expected value of firm C's EPS?

. Part 2 What is the coefficient of variation for firm A?

. Part 3 What is the coefficient of variation for firm B?

. Part 4 Assume that c = 4.928.

What is the coefficient of variation for firm C?