A) Calculate intrinsic value of both stocks if Lucas predicted that the market ratio should be 10

B) Lucas also found that the price of VZ today is RM30 per unit while CTL cost RM100 per unit. Based on the answer on A), which stock should Lucas buy? Why?

Lucas is analyzing two stocks for his next investment. Given a limited budget, he can only choose one of the two options. He collected some important information about the stocks in order to assist his decision making by using the price earning multiplier effect. The followings are related information about his two stock options. Key Financial Report as at 31st December 2019 Verizon (VZ) Net Profit RM30 million Number of outstanding stock 15 million unit Relative P/E multiplier 1.3 times CenturyTel (CTL) RM50 million 10 million units 2.5 times