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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

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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. Correlation with Treynor Pie Company + 1.0 + 0.7 + 0.2 0.8 Company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Sales (5 millions) $ 104 64 52 74 Standard Deviation in Earnings (5 millions) $ 2.0 Expected Earnings ($ millions) $8 8 5 7 1.5 1.7 3.2 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 a-2. Which company is the least risky? O Baby food company Treynor Ple Company O Gourmet restaurant O Nutritional products company a-3. Which company is the most risky? Treynor Pie Company O Gourmet restaurant O Nutritional products company O Baby food company b. Which of the acquisition candidates is most likely to reduce Treynor Ple Company's risk? O Baby food company O Gourmet restaurant O Nutritional products company

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