
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Chapter 20, Problem 11P
a.
Summary Introduction
To calculate: The coefficient of variation, both pre and post-merger, for Knight Corporation.
Introduction:
Coefficient of variation ( CoV ):
It is the ratio of SD (standard deviation) to the mean that shows the extent of the variability of the data in relation to the population's mean.
b.
Summary Introduction
To explain: The possible impacts on Knight Corporation’s post-merger P/E ratio assuming that there are risk-averse investors.
Introduction:
P/E Ratio:
A ratio which is computed by dividing a company’s current share price by its EPS is termed as P/E ratio. It helps in valuing a company’s profitability in the present times as well as in the future.
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