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An Analyst Has Determined That the Intrinsic Value of IBM

Question 76

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
E) none of the above

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