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

---

Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Fair Value Through Other Comprehensive Income

An accounting treatment for certain investments that are measured at their fair value with changes recognized in other comprehensive income until the investment is sold or disposed of.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Other Comprehensive Income

Components of comprehensive income not included in net income, reflecting gains and losses that have not been realized through the income statement.