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7 November, 15:15

The arnold fertilizer company's stock is selling for $55 in the market and its earnings per share is $5. the company is projected to grow at a rate of 22% over the next year. what is this company's price/earnings to growth (peg ratio?

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  1. 7 November, 15:17
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    PEG growth = 0.5

    Explanation:

    To compute the price / earning to growth ratio, we divide the price/earning ratio by the expected growth in earning

    P/E = Price per share / Earnings per share

    = 55/5

    =11

    PEG growth = P/E / Earnings growth

    = 11/22

    = 0.5
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