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


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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!
 
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kirby

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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.
 
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