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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) =
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 ?A = $3.61; E(EPSB) = $4.20, and ?B = $2.96.
Probability
0.1 0.2 0.4 0.2 0.1
Firm A: EPSA ($1.50) $1.80 $5.10 $8.40 $11.70
Firm B: EPSB (1.20) 1.50 4.20 6.90 9.60
Firm C: EPSC (2.40) 1.35 5.10 8.85 12.60
You are given that ?c = $4.11. Discuss the relative riskiness of the three firms' earnings using their respective coefficients of variation. Round your answer to two decimal places. CV A B C
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