PEG Ratio

PEG Ratio
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PEG Ratio

In the stock market’s investment terms the peg ratio refers to the price/earnings to growth ratio that determines what the trade off might be between what the stock earns the price of the stock that comes from each share and the expected level of growth for the company.

The P/E ratio will be higher for stock that has a better growth rate level.

The idea behind the Peg ratio is that dividing the P/E ratio by the growth rate of the earnings gives a better ratio when it comes to comparing companies that have different rates of growth.



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