A firm has a stock price of $60.00 per share. The firm's earnings are $80 million,...
A firm has a stock price of $60.00 per share. The firm's earnings are $80 million, and the firm has 25 million shares outstanding. The firm has an ROE of 16% and a plowback of 70%. What is the firm's PEG ratio? 1.54 1.30 1.67 1.17
Homework Answers
| Growth rate=ROE*retention ratio |
| growth rate=16*0.7 |
| growth rate = 11.2 |
PEG = (Price/(earnings/shares))/growth rate
=(60/(80/25))/11.2= 1.67
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