USA How to deal with negative PEG ratio for cost of equity research?

Joined
Jun 24, 2020
Messages
1
Reaction score
0
Country
Indonesia
I am conducting a research on the cost of equity. I followed the research model from a past literature but since I'm unable to obtain the forecasting EPS for PEG ratio, I'm using other PEG formula (PER/Earnings growth). My data contains many negative PEG and there are many outliers. How to deal with the negative PEG to get the correct result? Is it possible to put 0 to all the negative PEG? Referring a journal article would be great!
 

kirby

VIP Member
Joined
May 12, 2011
Messages
2,445
Reaction score
332
Country
United States
Go to Wikipedia article on peg ratios. It will tell you negative values are useless.

Do a google search on
[PDF] Cross-sectional PEG Ratios, Market Equity Premium, and Macroeconomic Activity Abstract This paper explores the role of the infor - fmaconferences.org
www.fmaconferences.org › papers

For some reason I cannot copy it well using the Ipad.. Anyway read how they gather data and how they deal with outliers.

You should consider taking a course on analysis of variance topics including statistical forecasting if you are going to do this kind of research.
 
Last edited:

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top