Estimated Growth Rate

A

Estimated earnings multiplier x Estimated earnings per share = Estimated future value of the share.

The estimated earnings multiplier is applied to the estimated earnings per share to arrive at estimated future values of a company's share.

The earnings multiplier, also known as the price-earnings (P/E) ratio, is a valuation metric used to assess the relative value of a company's stock. It is calculated by dividing the market price per share by the earnings per share (EPS). The earnings per share represent the portion of a company's profit that is allocated to each outstanding share of common stock.

By applying the earnings multiplier to the earnings per share, we can estimate the future value of a company's share. The logic behind this is that investors are willing to pay a certain multiple of a company's earnings to acquire its shares, and this multiple can be used to estimate the future price of the stock.

For example, if a company has an estimated earnings per share of $2 and the estimated earnings multiplier is 15, we can calculate the estimated future value of the company's share by multiplying the earnings per share by the earnings multiplier:

Estimated Future Value = Earnings per Share × Earnings Multiplier Estimated Future Value = $2 × 15 = $30

Therefore, based on the given information, the correct answer is A. earnings multiplier, earnings per share.