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The average P/B multiple in the life insurance industry is 4.00 times. Prudential Financial Inc. (NYSE ticker: PRU) has a book value of equity of
The average P/B multiple in the life insurance industry is 4.00 times. Prudential Financial Inc. (NYSE ticker: PRU) has a book value of equity of $1,380 million and 320 million shares outstanding. You believe that PRU should be valued at 25% higher than the industry average P/B ratio. Based on your belief, your estimate of the intrinsic value of its stock should be:
A. $4.31 3
B. $5.00 C. $17.25 D. $21.56 E. $4.00
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