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The earnings per share (EPS) for firm C are given below for various scenarios: Probability EPS C 0.3 -3.5 0.4 4.2 0.3 9.6 Data for

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 9.6

Data for Firms A and B are as follows: E(EPSA) = $5.3 and A = $3.72, E(EPSB) = $4.5 and B = $3.47.

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Part 1

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

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Part 2

What is the coefficient of variation for firm A?

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Part 3

What is the coefficient of variation for firm B?

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Part 4

Assume that c = 5.1. What is the coefficient of variation for firm C?

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Part 5

Which stock is most risky based on the coefficient of variation?

Firm B

Firm C

Firm A

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