Exhibit 14 -Based on the Information Provided,calculate the Intrinsic Value in 2010

question 71

Multiple Choice

Exhibit 14.5
Use the Information Below for the Following Problem(S)
$$\begin{array} { l c c } & \text { Wal-Elue } & \text { Industry } \\ \text { DPS } & 1.00 & 1.50 \\\text { Total As5et Tunover } & 3.20 & 2.50 \\\text { Net Profit Marpin } & 3.50 \% & 3.00 \% \\\text { EpS } & 4.00 & 3.00 \\\text { Total As5ets/Equity } & 3.00 & 4.00\end{array}$$
-Based on the information provided,calculate the intrinsic value in 2010 of a share of INV Corp.using the Present Value of Earnings Model (infinite holding period) .For 2010 net income was $250,000,total debt was $50,000,and there were 206,263 shares outstanding.The required rate of return is 12% and the estimated growth rate in earnings is 5.5%.

• A) $19.43
• B) $23.98
• C) $28.52
• D) $22.73
• E) $15.50

---

Definitions:

Grade Point Average

A numerical calculation representing the average value of the accumulated final grades earned in courses over time.

Item Analysis

A series of statistical tests and procedures that can be used to assess for homogeneity in a test.

Construct Validity

The degree to which a test accurately measures the theoretical construct or concept it is intended to measure.

Content Validity

The ability of an instrument to fully assess or measure a construct of interest by sufficiently sampling from the entire universe of items for which the instrument was designed to sample.