What is the standard deviation of eps

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1. Seth was born today. Harold and Maude Clark anticipate that Seth will begin college at age 18. College education expenses are $25,000 per year in today’s dollars and are expected to increase at an annual rate of six percent. The Clarks can earn an after-tax annual return of 12 percent. How much should the Clarks deposit at the end of each year to pay for Seth’s education. The last deposit will be made when Seth reaches his 18th birthday and he will attend college for four years.

$4,722.99

$5,292.50

$3,335.67

$2,435.99

2. The possible EBITs for the coming year are $4,000, $2,000, and $6,000 with the probabilities 10%, 70%, and 20% respectively. The interest payment is $1,000 and the corporate tax rate is 40%. There are 100 common shares outstanding. What is the standard deviation of EPS?

a. 15.87

b. 9.67

c. 13.76

d. 11.76

Reference no: EM132022863

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