In determining an appropriate P/E ratio for a company's stock, an analyst should consider:

• A. the P/E ratio of a major competitor
• B. the average P/E ratio of the company's industry
• C. the P/E ratio of a stock market index
• D. the company's historical P/E ratio
• E. all of the above
• F. only three of the above

The expression, "margin of safety" mentioned in Morningstar's approach to stock valuation, was originally coined by Benjamin Graham in his 1949 book, "The Intelligent Investor". The term margin of safety refers to:

• A. the difference between the intrinsic value of a stock and its price
• B. Earthlink's approach to maximizing its cash flows
• C. only buying stocks above a fair value estimate by a certain percentage
• D. a premium above fair value required before recommending a stock

The expected dividend divided by the current price of a share of the stock is known as 1. and 2.