Suppose that the average P/E multiple in the oil industry is 22.Exxon is expected to have an EPS of $1.50 in the coming year.The intrinsic value of Exxon stock should be

Question

Quizplus · Accepted Answer

The intrinsic value of Exxon stock can be calculated by multiplying the expected EPS ($1.50) by the average P/E multiple in the oil industry (22), which equals $33.00 (1.50 * 22 = 33).

Suppose That the Average P/E Multiple in the Oil Industry