. Given the following information, calculate the expected value for Firm C’s EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10, and sA = $3.61; E(EPSB) = $4.20, and sB = $2.96. b. You are given that sC = $4.11. Discuss the relative riskiness of the three firms’ earnings.
. Given the following information, calculate the expected value for
Firm C’s EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10,
and sA = $3.61; E(EPSB) = $4.20, and sB = $2.96. b. You are given that
sC = $4.11. Discuss the relative riskiness of the three firms’ earnings.
Profitability 0.1 0.2 0.4 0.2 0.1 Firm A: EPSa ($1.50) $1.80 $5.10 $8.40 $11.70 Firm B: EPSb ( 1.20) 1.50 4.20 6.90 9.60 Firm C: EPSc ( 2.40) 1.35 5.10 8.85 12.60
Profitability 0.1 0.2 0.4 0.2 0.1 Firm A: EPSa ($1.50) $1.80 $5.10 $8.40 $11.70 Firm B: EPSb ( 1.20) 1.50 4.20 6.90 9.60 Firm C: EPSc ( 2.40) 1.35 5.10 8.85 12.60
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