A stock has a stock price of $40 and earnings per share this question solution A stock has a stock price of $40 and earningsper share of $2 with a growth rate of 9%.What is the PEG ratio? Will a value investorbuy this? Will a PEG investor buy this? Whomight buy this stock?

To calculate the PEG ratio, we use the following formula:PEG Ratio=Earnings Growth RateP/E Ratio…

Answered: A stock has a stock price of $40 and…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 21MC

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A stock has a stock price of $40 and earnings per share of $2 with a growth rate of 9%. What is the PEG ratio? Will a value investor buy this? Will a PEG investor buy this? Who might buy this stock?