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
A) $28.12.
B) $93.50.
C) $63.00.
D) $72.00.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

The intrinsic value of KMP stock is calculated by multiplying the expected EPS by the average P/E multiple: $5.50 * 17 = $93.50.

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