Based on the Information Provided, Calculate the Intrinsic Value in 2009

question 62

Multiple Choice

Based on the information provided, calculate the intrinsic value in 2009 of a share of INV Corp. using the Present Value of Earnings Model (infinite holding period) . For 2009 Net Income was $250,000, total debt was $50,000, and there were 206,263 shares outstanding. The required rate of return is 12% and the estimated growth rate in earnings is 5.5%.

• A) $19.43
• B) $23.98
• C) $28.52
• D) $22.73
• E) $15.50

---

Definitions:

Other Expenses

Costs not directly related to the production or selling of goods or services, including interest payments, losses from asset sales, or administrative expenses.

Spending Variance

A financial metric that measures the difference between the budgeted or standard cost of production and the actual cost incurred.

Containers Refurbished

This term indicates reused or repaired containers to extend their lifecycle, making them functional for new purposes.

Indirect Materials

Materials used in the production process that are not directly traceable to a finished product, such as lubricants and cleaning supplies for machines.