You are an analyst covering pharmaceutical companies. You want to value Pfizer Inc. relative to the other companies in the industry using the market multiples method. You have collected the following information regarding Pfizer and the selected benchmark companies. Company Market Price Earnings per Share (EPS) Pfizer Inc. $37.50 $1.50 Abb Vie Inc. $105.00 $5.00 Merck & Co. $80.00 $2.00 Eli Lilly and Co. $180.00 $8.00 a) Calculate the average P/E ratio of Pfizer's competitors. b) Using the method of market multiples, calculate the intrinsic price of a share of Pfizer Inc. Hint: Use the average P/E ratio you calculated in part (a) as your benchmark P/E ratio. c) Based on your answer in part (b), is Pfizer overvalued or undervalued? Explain