Concept explainers
Expected EPS:
Estimated income to be earned from a company to its equity shareholders. EPS stands for earnings per share.
Calculate the expected EPS as follows:
Standard deviation is used to measure the risk of the investment.
Calculate the standard deviation as follows:
Coefficient of variation:
It is ratio of standard deviation to expected return.
Calculate the coefficient of variation as follows:
EPS for two firms is given. Calculate the expected value, standard deviation and coefficient of variation for the both the firms
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