PEG Payback Period

A key ratio that is used to determine the time it would take for an investor to double their money in a stock investment. The price-to-earnings growth payback period is the time it would take for a company's earnings to equal the stock price paid by the investor. A company's PEG ratio is used rather than their price-to-earnings ratio because it is assumed that a company's earnings will grow over time.

The best reason for calculating the PEG payback period is to determine the riskiness of an investment. Generally the longer the payback period the more risky an investment becomes. This is because the payback period relies on the assesment of a company's earnings potential. It is harder to predict such potential further into the future, and subsequently there is a greater risk that those returns will not occur.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Rate of return — In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.… …   Wikipedia

  • List of Teenage Mutant Ninja Turtles supporting characters — Table of appearances=A table of characters showing their appearances in the nine major incarnations of the TMNT franchise. Ace Duck Ace Duck is a fictional character from the original franchise.Toy LineHis action figure was released in 1989, part …   Wikipedia

  • List of baseball jargon (P) — to paint:To throw pitches at the edges of the strike zone. A pitcher who can paint consistiently may be referred to as Rembrandt or Picasso, and can be said to paint the black or paint the corner.park:To hit a home run. He parked a three run… …   Wikipedia

  • List of gangs in the Grand Theft Auto series — The Grand Theft Auto series of video games features a myriad of fictional gangs and criminal organizations of various ethnicities, histories and activities, which have served as both primary and secondary vehicles in the games plot points, as… …   Wikipedia

  • Cable television — CATV redirects here. For CAT5 cable, see Category 5 cable. Coaxial cable is often used to transmit cable television into a residence. Cable television is a system of providing television programs to consumers via radio frequency (RF) signals… …   Wikipedia

  • List of Rescue Me characters — This article contains summaries of characters appearing on the TV series Rescue Me. Contents 1 The Firehouse (62 Truck) 1.1 Firefighters of 62 Truck 1.2 Bosses 1.3 Tran …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.