Question #101
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: 34
Status: Unattempted
Question
Good Sports, Inc., (GSI) has a leading price-to-earnings (P/E) ratio of 12.75 and a 5-year consensus growth rate forecast of 8.5%. What is the firm's P/E to growth (PEG) ratio?
Answer Choices:
A. 1.50
B. 0.67
C. 150.00
Explanation
The firm's PEG is 12.75 / 8.50 = 1.50.