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.

Question 6 options:

The firm is overvalued.

The firm is undervalued.

The firm is properly valued.

There is not enough information to answer the question.