Assignment:
The price-to-earnings growth ratio, or PEG ratio, is the market's valuation of a company relative to its earnings prospects. A PEG ratio of 1 indicates that the stock's price is in line with growth expectations. A PEG ratio less than 1 suggests that the stock of the company is undervalued (typical of value stocks), whereas a PEG ratio greater than 1 suggests the stock is overvalued (typical of growth stocks). The accompanying table shows a portion of PEG ratios of companies listed on the Dow Jones Industrial Average; the complete data set can be found on the text website and is labeled DOW PEG Ratios.
| Company |
Peg Ratio |
| 3M(MMM) |
1.4 |
| Alcoa (AA) |
0.9 |
| : |
: |
Walt Disney (DIS)
|
1.2 |
Construct a stem-and-leaf diagram on the PEG ratio. Interpret your findings.
Provide complete and step by step solution for the question and show calculations and use formulas.