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nordsb [41]
3 years ago
15

Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annu

ally and are expected to continue doing so. The firm has 21,500 shares of stock outstanding at a price per share of $23.40. What is the firm's PEG ratio
Business
1 answer:
GalinKa [24]3 years ago
3 0

Answer:

The firm's PEG ratio is equal to 5.93

Explanation:

A valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth are referred to as the 'PEG ratio' (price/earnings to growth ratio).

Generally, a company with a higher growth rate would have a higher P/E ratio.

PE ratio = Stock price/EPS

             = 23.4/1.36

 PE ratio = 17.205

PEG ratio = PE ratio/ Earning growth ratio

                 = 17.205/2.9

PEG ratio    = 5.93

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One benefit of specialization is that it​
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3 years ago
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svetoff [14.1K]

Answer:

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