Exhibit 14.4 Use the Information Below for the Following Problem(S)

question 56

Multiple Choice

Exhibit 14.4
Use the Information Below for the Following Problem(S)
The Valentine Company currently has a 14% annual growth rate while the market average is 4 percent. The market multiple is 15.
-Refer to Exhibit 14.4.Determine the justified P/E ratio for the Valentine Company assuming Valentine can maintain its superior growth rate for the next 10 years.

• A) 3.0
• B) 9.2
• C) 16.6
• D) 28.6
• E) 37.6

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Definitions:

Remember

The cognitive process of recalling information or experiences from the past.

Circular Fallacy

An argument that commits the logical fallacy of assuming what it is attempting to prove, thus reasoning in a circle.

Negative Way

A pessimistic or adverse approach to thinking, feeling, or responding to situations, often focusing on undesirable outcomes.

Depressed

A state of low mood and aversion to activity that can affect a person's thoughts, behavior, feelings, and sense of well-being.