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Your firm operates in an industry in which the average PE ratio is 15.2. Your firm's net income last year was $150 million, and its
Your firm operates in an industry in which the average PE ratio is 15.2. Your firm's net income last year was $150 million, and its market cap is $3.5 billion. Calculate an initial value of your equity using a multiples approach and make a judgment on the value of your firm's equity.
Options:
A. The firm is overvalued.
B. The firm is undervalued.
C. The firm is properly valued.
D. There is not enough information to answer the question.
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