1. Learn
    2. /
  2. Courses
    3. /
  3. Equity Valuation in R

Exercise

Calculating the Relevant Multiple

Assuming the companies selected are reasonably comparable to the subject firm, then using the average (or median) multiple may be a reasonable estimate of the valuation multiple to apply to the subject firm. The P/E and P/B multiples for each of the comparable firms are stored in the pharma object. For this exercise, calculate the average of each of those metrics.

Instructions

100 XP
  • Print contents of pharma data object.
  • Calculate the average for all the metrics in pharma (i.e., columns 2 through 4) using the colMeans() command.