Which of the following ratios is the most commonly used ratio for predicting the performance of a growth company?
A) PE ratio
B) PG ratio
C) PEG ratio
D) MV/BV ratio
E) BV/MV ratio

Question

Quizplus · Accepted Answer

The PEG ratio (price/earnings to growth ratio) is the most commonly used ratio for predicting the performance of a growth company. It takes into account both the company's current valuation (PE ratio) and its expected earnings growth. A PEG ratio of 1 is considered fair value, while a ratio below 1 is considered undervalued and a ratio above 1 is considered overvalued.

Which of the Following Ratios Is the Most Commonly Used