Multiple Choice
An analyst has determined that the intrinsic value of IBM stock is $80 per share using the capitalized earnings model.If the typical P/E ratio in the computer industry is 22, then it would be reasonable to assume the expected EPS of IBM in the coming year is
A) $3.64.
B) $4.44.
C) $14.40.
D) $22.50. $80(1/22) = $3.64.
Correct Answer:
Verified
Correct Answer:
Verified
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