Question #72
Reading: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples
PDF File: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples.pdf
Page: 27
Status: Unattempted
Correct Answer: B
Question
The definition of a PEG ratio is price to earnings (P/E):
Answer Choices:
A. divided by the average growth rate of the peer group
B. divided by the expected earnings growth rate
C. divided by average historical earnings growth rate
Explanation
The PEG ratio is P/E divided by the expected earnings growth rate.