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

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Definitions:

Sense of direction

An understanding or intuition of how to proceed in a particular situation.

Negotiation Planning

involves preparing strategies and objectives before entering into negotiation talks to better position oneself for favorable outcomes.

BATNAs

A reiteration emphasizing the importance of understanding one’s best alternatives to a negotiated agreement as crucial leverage in negotiations.

Distributive process

The method through which resources or outcomes are allocated among parties, often implying a zero-sum scenario similar to distributive bargaining but with a broader application.