How Much Should a Share of Stock Be Worth for a Firm

question 15

Multiple Choice

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

• A)$40
• B)$44
• C)$48
• D)$88

---

Definitions:

Experimentally Sound Practices

Methods or approaches in research that are rigorously tested and validated through experimentation.

Level of Sophistication

The degree of complexity, development, or refinement exhibited by an individual, system, or process.

Ecological Isomorphism

The concept that ecological systems or organisms show similar structures, processes, or relationships despite being from different environments or evolutionary backgrounds.

Selection Bias

A problem in experimental design stemming from the experimental groups not being comparable.