Question #97
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: 33
Status: Unattempted
Correct Answer: A
Question
The relative valuation model known as the PEG ratio is equal to:
Answer Choices:
A. price-to-earnings (P/E) / earnings per share (EPS) growth rate
B. earnings per share growth rate / price-to-earnings
C. P/E × earnings
Explanation
The PEG ratio is equal to the price-to-earnings ratio divided by the EPS growth rate.