Suppose That the Average P/E Multiple in the Oil Industry

question 86

Multiple Choice

Suppose that the average P/E multiple in the oil industry is 16.Shell Oil is expected to have an EPS of $4.50 in the coming year.The intrinsic value of Shell Oil stock should be

• A)$28.12.
• B)$35.55.
• C)$63.00.
• D)$72.00.
• E)None of the options

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Definitions:

Factory Supervisor

A role responsible for overseeing the operation of a manufacturing facility, including managing employees and ensuring production targets are met.

Manufacturing Overhead

All indirect costs associated with the production process, including but not limited to salaries and utilities.

Workman's Compensation Insurance

Workman's Compensation Insurance is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Factory Utilities

The costs of utilities used in a factory, such as electricity, gas, and water, that are necessary for production processes.