1. Suppose that the average P/E multiple in the oil services industry is 16x. The ABC Exploration company earned $3.20 last year. The company is expected to produce earnings that will be 10% higher at the end of this year. The intrinsic value of ABC should be:
$56.32 per share
$67.58 per share
$51.20 per share
$72.00 per share
2. A 10%, $1,000, 15-year bond paying semi-annual coupons is callable in 10 years at 110% par. It is currently selling for $980. What is its yield to call?
10.57%
10.27%
10.61%
10.91%