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

question 59

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.
• E) None of the options are correct.

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Definitions:

United States

A country located in North America, comprising 50 states and a federal district, known for its significant influence in global economic, political, and cultural matters.

International Trade

The exchange of goods and services between countries, driven by comparative advantages and resulting in increased economic efficiency and wealth.

World Output

The total production of goods and services by all countries in the world over a specified period.

Consumption Levels

The quantity of goods and services that individuals or communities use or consume.