You believe the expected return on Stellar Innovations is 12.50%, and that the variance of Stellar Innovations' returns is 0.2500. What is the coefficient of variation for this company? Express the answer with 3 decimal places.
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- Emmons Corporation has a 0.0 probability of a return of 0.49, a 0.4 probability of a rate of return of 0.07, and the remaining probability of a 0.0 rate of return. What is the variance in the expected rate of return of Emmons Corporation?Adams Inc. has the following data, rRF = 5%, RPm = 6% and Beta = 1.05. What is the firms cost of common from reinvested earning using CAPM? (11.30%, 12.72%, 11.64%, 11.99%, and 12.35%)A firm is considering an investment that has an expected return of 25% and a standard deviation of 43%. What is the investment's coefficient of variation? Do not round your intermediate calculations. Round the final answer to 2 decimal places.
- The expected annual returns are 15% for investment 1 and 12% for investment 2. The standard deviation of the first investment’s return is 10%; the second investment’s return has a standard deviation of 5%. A.) Which investment is less risky based solely on standard deviation? (Investment 1 or Investment 2)B.) Which investment is less risky based on coefficient of variation? (Investment 1 or Investment 2)C.) Which is a better measure given that the expected returns of the two investments are not the same? (Coefficient of Variation or Standard Deviation)Curry Rubber manufactures rubber bands for retail companies. The accounting manager has performed a regression analysis of past data. You notice that the formula has an R-squared of 0.68, a t-value of 2.2, and a standard error of the estimate of $218,200. The estimate for next quarter costs is $2,597,623. Calculate Standard Error as a % of predicted total cost which represents a measure of precision of his regression analysis? (Round your answer to one decimal place, i.e., 0.052 = 5.2%.)Consider an economy with two types of companies, S and I. The profits of companies S always move together, but the profits of companies I move independently of each other. For both firms, there is a 70% probability that the firm's return is 30%, and a 30% probability that the return is -30%. The standard deviation of an individual company's return is closest to the value: Choose one: A.23.0% B.5.25% C.15.0% D.10.0% Only typed answer
- Complete steps thanks!a. 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 OA = $3.59; E(EPSB) $4.20, and B $2.97. Do not round intermediate calculations. Round your answer to the nearest cent. E(EPSC): $ A Firm A: EPSA Firm B: EPSB Firm C: EPSC BU Probability b. You are given that oc = $4.11. Discuss the relative riskiness of the three firms' earnings using their respective coefficients of variation. Do not round intermediate calculations. Round your answers to two decimal places. CV The most risky firm is -Select- V = 0.1 0.2 0.4 0.2 0.1 ($1.65) $1.80 $5.10 $8.40 $11.85 (1.20) 1.35 4.20 7.05 9.60 (2.54) 1.35 5.10 8.85 12.74Given that the total cost, C, is related to sales volume, x, by the equation y=1000+0.2x, say true or false for the following and proof it. (a) The cost-sales line rises $2 for each increase of $10 in sales volume. (b) The slope of the line is interpreted as variable cost
- a. 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 OA = $3.63; E(EPSB) = $4.20, and B = $2.98. Do not round intermediate calculations. Round your answer to the nearest cent. E(EPSC): $ A B C с Firm A: EPSA Firm B: EPSB Firm C: EPSc b. You are given that oc = $4.12. Discuss the relative riskiness of the three firms' earnings using their respective coefficients of variation. Do not round intermediate calculations. Round your answers to two decimal places. CV The most risky firm is -Select- ✓ Probability 0.1 0.2 0.4 0.2 0.1 ($1.68) $1.80 $5.10 $8.40 $11.88 (1.20) 1.34 4.20 7.06 9.60 (2.57) 1.35 5.10 8.85 12.77Consider a company that pays out all its earnings (i.e., the payout ratio = 1 or plowback/retention ratio=0). The required return for the firm is 13%. Compute the intrinsic P/E if its ROE is 15%. Compute the intrinsic P/E if its ROE is 20%. Discuss why your answers to parts (a) and (b) differ or do not differ from one another. Suppose that the company’s ROE is 13%. Compute its intrinsic P/E value. Would the answer to part (d) change if the company retained half of its earnings instead of paying all of them out? Discuss why or why not.Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.2 percent and the standard deviation was 10.6 percent. a. What is the probability that your return on this asset will be less than –9.7 percent in a given year? Use the NORMDIST function in Excel® to answer this question. b. What range of returns would you expect to see 95 percent of the time? c. What range of returns would you expect to see 99 percent of the time?