FIGURE 8.13PEG Ratios versus ln(Expected Growth Rate)
The results of the regression of PEG ratios against
ln(expectedgrowth),beta,andpayoutratioarereportedhere
for the entire market (2,159 firms).
AswiththeP/Eratioregression,thisregressioncanbeused
to estimate predictedPEGratiosfor individualcompanies,
although theR-squared is even lower thanit wasfor P/E
ratios. Across the market, higher-growth and higher-risk
companies tendto havelower PEGratios thantheir more
stable lower-growth counterparts.