An Analyst Has Determined That the Intrinsic Value of VM

question 17

Multiple Choice

An analyst has determined that the intrinsic value of VM CORP stock is $20 per share using the capitalized earnings model. If the typical P/E ratio in the computer industry is 25, then it would be reasonable to assume the expected EPS of VM CORP in the coming year is

• A) $3.63.
• B) $4.44.
• C) $0.80.
• D) $22.50.

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Definitions:

Merge Cell

A function in spreadsheet software that combines multiple cells into a single cell, often used to create a header that spans several columns.

Diagonal Border

A stylistic feature applied to table cells or sections within a document or spreadsheet, which displays a border cutting diagonally across the cell or section for visual effect or organizational purposes.

AutoFit Contents

A feature that automatically adjusts the size of cells in a spreadsheet to fit their contents.

Distribute Columns

A feature in spreadsheet and design software that evenly spaces selected columns across a given area or page width.