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 _____.
A)$33.00
B)$35.55
C)$63.00
D)$72.00
E)none of the above

Question

Quizplus · Accepted Answer

The intrinsic value of Exxon stock is $33.00. This is calculated by multiplying the expected EPS of $1.50 by the average P/E multiple of 22.

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