Exhibit 9-4 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 47

Multiple Choice

Exhibit 9-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
The Valentine Company currently has a 14% annual growth rate while the market average is 4%. The market multiple is 15.
-Refer to Exhibit 9-4. Determine the justified P/E ratio for the Valentine Company assuming Valentine can maintain its superior growth rate for the next 10 years.

• A) 3.0
• B) 9.2
• C) 16.6
• D) 28.6
• E) 37.6