Business and Personal Finance Dictionary

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• PEG RATIO
  
  An indicator of whether a stock is undervalued or overvalued. To obtain the PEG ratio, a stock's price/earnings ratio (P/E) is divided by its forecasted earnings growth rate. A fairly valued stock would have a PEG ratio of 1, because its current P/E and future earnings growth rate being equal. A ratio of less than 1.0 can be an indication that the stock is undervalued, and poised to grow.
  
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