An Analyst Has Determined That the Intrinsic Value of Dell

question 54

Multiple Choice

An analyst has determined that the intrinsic value of Dell stock is $34 per share using the capitalized earnings model. If the typical P/E ratio in the computer industry is 27, then it would be reasonable to assume the expected EPS of Dell in the coming year will be

• A) $3.63.
• B) $4.44.
• C) $14.40.
• D) $1.26.

---

Definitions:

Preexisting Schemas

Cognitive frameworks or structures that already exist within our minds, influencing how we perceive and interpret new information.

Ambiguous Information

Information that lacks clarity, can be interpreted in multiple ways, or does not provide a clear direction or answer.

Misremember

The act of recalling an event or information inaccurately, often due to memory distortions or biases.

Time Frames

The period during which an action, event, or process occurs or is expected to occur, often influencing planning and decision-making processes.