According to Peter Lynch, a rough rule of thumb for security analysis is that
A) the growth rate should be equal to the plowback rate.
B) the growth rate should be equal to the dividend-payout rate.
C) the growth rate should be low for emerging industries.
D) the growth rate should be equal to the P/E ratio.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Peter Lynch's rule of thumb suggests that the growth rate should be roughly equal to the P/E ratio, known as the PEG ratio being around 1.

According to Peter Lynch, a Rough Rule of Thumb for Security