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Treynor Ple Company is a food company specializing in high calorie snack foods. It is seeking to diversify its food business and lower Its risks.

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Treynor Ple 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. Expected Earnings millions) Correlation with Treynor pie Company + 1.0 +0.4 +0.3 -0.5 Company Treynor Pie Company Gourmet costaurant Baby food company sutritional products company S Sales (5 millions) 5 189 63 57 76 standard deviation in Earnings IS millions $200 1.4 1.6 3.3 2 4 5 0-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (0.g., $100,000 should be entered as "10"). Round your answers to 3 decimal places.) Coefficient of Variation Treynor Pe Company Gourmet restaurant Baby food company Nutritional products company a-2. Which company is the least risky? O Baby food company O Gourmet restaurant Treynor Ple Company O Nutritional products company 2-3. Which company is the most risky? O Gourmet restaurant O Nutritional products company O Treynor Ple Company O Baby food company b. Which of the acquisition candidates is most likely to reduce Treynor Pie Company's risk? O Baby food company O Gourmet restaurant O Nutritional products company

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