A firm has a stock price of $60.00 per share. The firm's earnings are $60 million, and the firm has 20 million shares outstanding. The firm has an ROE of 10% and a plowback of 70%. What is the firm's PEG ratio?

the PEG ratio is 2.85

Explanation:

The computation of the firm PEG ratio is shown below:

Before that following calculations need to be done

Earnings per share = Earnings ÷Number of shares outstanding

 = ($60 million ÷ 20 million shares )

= $3

Now

Growth rate = ROE × Plowback ratio

= 0.10% × 0.70%

= 7%

Now

PE ratio = Current price ÷ EPS

= $60 ÷ $3

= 20

And, finally

PEG ratio is

= (Current price ÷ EPS) ÷ Growth rate

= (20  ÷ 7)

= 2.85

hence, the PEG ratio is 2.85

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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