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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
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. Company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Correlation with Treynor Pie Company +1.0 +0.5 Sales ($ millions) $ 189 66 54 75 Expected Earnings ($ millions) S8 6 3 5 Standard Deviation in Earnings ($ millions) $ 4.0 1.4 1.6 + 0.2 -0.9 3.5 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.) Answer is not complete. Coefficient of Variation 0.333 Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company
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