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Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversity its food business and lower its risks. It
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversity 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. Sales Correlation with Treynor Pie Company ($ millions) +1.0 $102 +0.6 65 +0.2 55 Expected Earnings ($ millions) Company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Standard Deviation in Earnings ($ millions) $2.0 1.1 1.8 5 3 -0.5 78 4 3.4 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.) Coefficient of Variation Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company
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