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Options
- A
Company with P/E of 13
-
Company with P/E of 40
Correct answer
- C
Both are equally cheap
- D
Insufficient data
Why this is the answer
PEG (Company 1) = 40 ÷ 30 = 1.33. PEG (Company 2) = 13 ÷ 8 = 1.62. Lower PEG indicates better valuation relative to growth.
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