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 above

Question

Quizplus · Accepted Answer

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

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