InfoTech Solutions Inc

question 17

Multiple Choice

InfoTech Solutions Inc.has a historic P/E multiple of 26,a current EPS of $1.10 projected to grow by 5% in the coming year,and a forward looking P/E multiple of 22.With this information please estimate the current price of the firm's stock

• A)$30.03
• B)$28.60
• C)$26.20
• D)$25.41

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Definitions:

Fundamental Attribution Error

A cognitive bias that causes people to overemphasize personal characteristics and ignore situational factors in explaining others' behavior.

Availability Heuristic

A cognitive bias where individuals rely on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.

First Instinct Fallacy

The false belief that it is better not to change one’s first answer on a test even if one starts to think that a different answer is correct.

Upward Counterfactual Thinking

The process of imagining better alternatives to past events, which can have various emotional or motivational effects.