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:

Mainframes

Large, powerful computers used primarily by large organizations for critical applications, massive data processing, and transaction processing.

Large Computers

High-capacity, powerful computing systems often used in enterprise settings for large-scale computation, data processing, and complex tasks. These may include mainframes and supercomputers.

The CPU

The Central Processing Unit, which is the primary component of a computer that performs most of the processing inside a computer.

Data

Information that has been collected, organized, and can be interpreted or analyzed for various purposes.