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

question 10

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 are correct.

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Definitions:

Type A

Type A refers to a personality pattern characterized by high levels of competitiveness, impatience, aggressiveness, and a sense of urgency.

Mindfulness Meditation

A form of meditation focusing on being intensely aware of what you're sensing and feeling in the moment, without interpretation or judgment, to achieve mental clarity and emotional calmness.

Relaxation Training

Techniques aimed at reducing tension and stress, promoting physical and mental well-being, often involving exercises such as deep breathing, meditation, or progressive muscle relaxation.

Pain-Control Medication

Drugs or substances used to reduce or alleviate acute or chronic pain.