Suppose that the average P/E multiple in the gas industry is 17.KMP is expected to have an EPS of $5.50 in the coming year.The intrinsic value of KMP stock should be

Question

Quizplus · Accepted Answer

The intrinsic value of KMP stock can be found by multiplying the EPS by the industry average P/E multiple:

Intrinsic value = EPS * P/E multiple
Intrinsic value = $5.50 * 17
Intrinsic value = $93.50

Therefore, the best choice is B, which is the intrinsic value of KMP stock at $93.50.

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