Question: Suppose that the average P/E multiple in the oil industry is 16. Shell Oil is expected to have an EPS of $4.50 and to pay

Suppose that the average P/E multiple in the oil industry is 16. Shell Oil is expected to have an EPS of $4.50 and to pay a dividend of $2.25 in the coming year. The intrinsic value of Shell Oil stock should be:

A. $36.00

B. $35.55

C. $72.00

D. $28.12

E. None of the options are correct.

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