If Widget Corp.has a PEG value of .50,the stock is most likely:
A)undervalued based on its projected growth rate.
B)overvalued based on its projected growth rate.
C)overvalued based on its $0.50 per share dividend.
D)overvalued based on its good historical earnings.
E)undervalued based on its poor historical earnings.

Question

Quizplus · Accepted Answer

A PEG (Price/Earnings to Growth) value of less than 1 is generally considered to indicate that a stock is undervalued relative to its projected earnings growth rate.