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

question 91

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 above

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Definitions:

Smashed

In psychological experiments, particularly those related to memory and suggestion, "smashed" is often used to describe the influence of specific wording on participants' memory recall, such as their estimation of speed in a car accident.

Eyewitness Memory

The ability of a person who has witnessed an event to remember details about that event.

Malleable

Capable of being shaped or adjusted; easily influenced or adaptable.