When the PEG Ratio for a Stock Is Less Than

question 101

Multiple Choice

When the PEG ratio for a stock is less than 0.5,this indicates that the

• A)market believes the earnings growth estimate reflected in the consensus forecast is too low.
• B)market expects the future EPS growth to be greater than currently reflected in the analysts' consensus forecast EPS.
• C)stock is overvalued.
• D)stock is undervalued.
• E)stock is correctly valued.

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Definitions:

Credit Sales

Transactions where goods or services are sold and payment is delayed, often creating accounts receivable.

Compounded Monthly

Interest calculation method that adds interest to the principal balance monthly, increasing the amount of subsequent interest.

Single Payment

A one-time transfer of money to settle a debt or purchase.

Due

Refers to the date or time by which something is expected to be completed or fulfilled, such as a payment or assignment.