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Mega Corporation Has the Following Returns for the Past Three

question 23

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Mega Corporation has the following returns for the past three years: 8%, 12% and 10%. Calculate the variance of the return and the standard deviation of the returns.


Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings and dividends without needing to increase equity or borrowings.

Debt-Equity Ratio

The measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Net Income

The overall earnings of a business following the deduction of all costs, taxes, and expenses from its gross revenue.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without having to increase leverage or equity financing.

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