The Arnold Fertilizer Company's stock is selling for $64 in the market and its earnings per share is $8.The company is projected to grow at a rate of 16% over the next year.What is this company's price/earnings to growth ratio?

Question

Quizplus · Accepted Answer

The price/earnings to growth (PEG) ratio is calculated by dividing the P/E ratio by the growth rate. The P/E ratio is $64/$8 = 8. The growth rate is 16%. So, the PEG ratio is 8/16 = 0.50.

The Arnold Fertilizer Company's Stock Is Selling for $64 in the Market