Suppose That the Average P/E Multiple in the Oil Industry

question 77

Multiple Choice

Suppose that the average P/E multiple in the oil industry is 22.Exxon is expected to have an EPS of $1.50 in the coming year.The intrinsic value of Exxon stock should be

• A)$33.00.
• B)$35.55.
• C)$63.00.
• D)$72.00.

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Definitions:

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without the need for prior learning.

Secondary Reinforcer

A stimulus that becomes reinforcing through its association with a primary reinforcer, such as money earning its value through its exchange for food or other needs.

Primary Reinforcer

A stimulus that is naturally rewarding and satisfying, such as food or water, which does not require learning to become desirable.

Negative Reinforcement

A process in behavioral psychology where a response is strengthened because it is followed by the removal of an unpleasant stimulus.