The Retail Analyst at Morgan-Sachs Values Stock of the GAP

question 28

Multiple Choice

The retail analyst at Morgan-Sachs values stock of the GAP at $38.00 per share. They are using the average industry "forward" P/E ratio of 17. Their forecasted earnings per share for next year is

• A) $0.54.
• B) $1.50.
• C) $2.24
• D) There is not enough information calculate earnings per share.

---

Definitions:

Rhizomes

A type of underground stem that sends out roots and shoots from its nodes, often used in plant reproduction.

Secondary Sex Characteristics

Physical features that emerge during puberty which are not directly involved in reproduction but distinguish the sexes.

Gonads

The primary reproductive organs that produce gametes (sperm or eggs) and sex hormones, including ovaries in females and testes in males.

Thyroid

A gland in the neck that produces hormones regulating growth and metabolism.