Question

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?

Answer 1

PEG growth = 0.5

Step-by-step 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