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Johnson & Johnson (JNJ) has a forward P/E of 16.26, a Price/Sales of 3.80, a Price/Book...

Johnson & Johnson (JNJ) has a forward P/E of 16.26, a Price/Sales of 3.80, a Price/Book of 3.84, a PEG ratio of 2.75, and an enterprise value/EBITDA of 11.40. What is the forecasted growth rate of earnings over the next five years?

A.

3.8%
B.

4.2%
C.

5.9%
D.

4.9%
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Answer #1

PEG Ratio = (P/E) / EPS Growth Rate

2.75 = 16.26 / EPS Growth Rate

EPS Growth Rate = 16.26 / 2.75 = 5.9%

Hence, Option "C" is correct.

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