The coefficients of variation for all the four companies and to identify the most and least risky companies. Introduction: Coefficient of variation ( CoV ): It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

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Answer 1

Question

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

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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 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 Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Correlation with Treynor Pie Company + 1.0 a-2. Which company is the least risky? Traunar Din Company +0.4 +0.4 -0.7 Coefficient of Variation O Nutritional products company O Baby food company O Gourmet restaurant 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.) Sales $ millions $…

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. Correlation with Standard Deviation Sales ($ millions) $ 197 in Earnings ($ millions) $ 4.0 Treynor Pie Company + 1.0 + 0.6 + 0.3 - 0.7 Company Treynor Pie Company Expected Earnings ($ millions) $ 9 $ Gourmet restaurant 64 1.3 Baby food company Nutritional products company 54 1.8 75 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…

The Golden Fence Company and Stone Wall Corporation are competitors in manufacturing walls and fences. You are interested in comparing the two firms' profitability. Their income statements and other information are presented below. LOADING... (Click the icon to view the comparative income statements.) Golden Fence is the larger company based on sales and total assets, so you perform the following steps to compare and analyze the companies. Read the requirements LOADING... . Requirement a. Prepare common-size income statements. Comment on differences in the relative size of each line item. (Round percentages to the nearest tenth of a percent, X.X%.) Percent of Sales Golden Fence Stone Wall Golden Fence Stone Wall (amounts in millions) Company Corporation Company Corporation Sales $987,236 $67,450 % % Cost of goods sold 678,626 43,370 % % Gross profit 308,610 24,080…

Answer 2

Question

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Expert Solution & Answer

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Answer 3

Question

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Expert Solution & Answer

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See solution

Answer 5

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Answer 6

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

Answer 7

Chapter 13, Problem 22P

a.

Summary Introduction

To calculate: The coefficients of variation for all the four companies and to identify the most and least risky companies.

Introduction:

Coefficient of variation ( CoV ):

It is a statistical tool used to measure the dispersion of points in a series of data around the mean. It is calculated as the ratio of standard deviation to mean.

Answer 8

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Answer 9

b.

Summary Introduction

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 13 - Prob. 1DQ Ch. 13 - Discuss the concept of risk and how it might be...Ch. 13 - When is the coefficient of variation a better...Ch. 13 - Explain how the concept of risk can be...Ch. 13 - If risk is to be analyzed in a qualitative way,...Ch. 13 - Assume a company, correlated with the economy, is...Ch. 13 - Assume a firm has several hundred possible...Ch. 13 - Explain the effect of the risk-return trade-off on...Ch. 13 - What is the purpose of using simulation analysis?...Ch. 13 - Assume you are risk-averse and have the following...

Solution Summary: The author explains the calculation of the coefficients of variation for all four companies. The least risky company is Gourmet Restaurant, while the riskiest is Nutritional Product Company.

Videos

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Want to see the full answer?

Chapter 13 Solutions

Solution Summary: The author explains the calculation of the coefficients of variation for all four companies. The least risky company is Gourmet Restaurant, while the riskiest is Nutritional Product Company.

Videos

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â Introduction: Risk:Â It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.

Want to see the full answer?

Chapter 13 Solutions

To explain:Â The acquisition candidate most likely to reduce the risk of Treynor Pie Company.Â

Introduction:

Risk:Â

It is the measure of discrepancy between the expected and actual results. It arises due to the variation between the expectations and results.