Discussion (200 words): The Peg Ratio (price-earnings-growth) appears to be a refinement that allows us to do what? Is the ratio aptly named? Explain and discuss.

Respond to these two classmates’ discussion post (50-100 words for each response):

Discussion post 1: The PEG ratio stands for price/earnings-to-growth ratio which is the stock’s P/E ratio divided by the growth rate of the earnings for a specific time period. The Peg ratio was developed to factor in the projected growth rate of future earnings from the standard P/E ratio. The Peg ratio can allow investors a better assessment at how fast a company is growing thus providing us a better picture of a company’s value than only using the P/E ratio alone. The interpretation of the ratio is as followed, when the ratio results in 1 or lower, it means the stock is either at par or undervalued and if above 1, the stock is overvalued relative to the growth rate. Generally, when using the Peg ratio, the higher return for investors are companies that have a faster growth rate. If comparing two companies, one company has a growth rate of 5% and the other has a growth rate of 10%, through the peg ratio, it takes into account a company’s earning growth whereas p/e ratio does not and the company with 10% growth would be the better investment for investors.

Peg ratio does provide more meaningful information regarding the value of a stock or two similar stocks because of the added factor of growth potential. Although the peg ratio can allow investors another instrument to value stocks, it may not be a completely reliable ratio. Other metrics should be used to value a stock along with the peg ratio for proper valuation. The reason the peg ratio can carry risks is because the factor of future earnings growth potential is an estimation which creates uncertainty within the overall ratio. I believe it is aptly named as the peg ratio because it compares a company’s P/E ratio to the expected rate of growth to assess a stock’s value.

Discussion post 2: The PEG ratio (Price/Earnings to Growth Ratio) is a valuation metric that looks at the price of a stock, the earnings per share, and also the company’s growth potential. The Price/Earnings ratio is generally higher for a company that has a higher growth rate. Using the P/E ratio would make companies with significant amounts of growth appear overvalued when compared to others. The assumption that incorporating a company’s growth rate, the ratio is going to be better for comparing companies with various growth rates. A PEG ratio of 1 supposedly represents a fair trade-off between cost and growth, which indicates that a stock is reasonably valued with the expected growth rate. A PEG ratio between 0 and 1 might suggest that the company might provide higher returns.

Yes, I think that the ratio has been aptly named. Investors might prefer the PEG ratio because it’s putting a value on the company’s expected growth earnings. The PEG ratio gives investors insight into a company’s high P/E ratio because it looks at a high stock price and incorporates the expected growth for the company.

Assignment (1-2 double space): There are various limitations to employing the PE Ratio for company to company comparisons. Describe several of the limitations. A better measure would be to employ the PEG Ratio, how would you calculate?

This research paper should be approximately 2500 words (not including the bibliography or footnotes)

Chicago manual of Style is to be followed for citations:

http://www.chicagomanualofstyle.org/tools_citationguide/citation-guide-1.html (Links to an external site.)

Include a bibliography at the end of your paper

Please maintain academic integrity. If you plagiarize, it will be reported and you will fail the class

• Pick a non-US film from the period 1960-present.
• You may write a comparative paper if you so wish, but please do not write about more than 2 films.
• You must use at least 5-6 sources you have found during research. All 5/6 sources may be secondary, but if you want to include primary sources, limit these to 2, with the others being scholarly, secondary sources rather than popular sources (check with your TA if you are unsure which is which)
• The choice of film is yours, you may use a film from the syllabus, or from off the syllabus, but you must have access to the film (so you can watch it repeatedly in order to write your paper)
• Write a research based paper in which you critically analyze and discuss the film through a historical framework. When thinking about which kind of framework or focus you want to take, consider some of these potential avenues:
  • How concepts of authorship or film style were affected by the political environment in which the film was made e.g. under fascism, post-colonialism…
  • The role the government played in constricting or liberating film production, for example, through legislation or subsidies and other financial support.
  • Other cultural or social issues that the film/s may address directly, such as youth culture, feminism, immigration, violence, etc. These issues must be historically situated within a specific national context (in other words, think about why are your issue is important, or being debated in the time and place the film is being made?) This information will help you analyze your film, by providing historical context for your analysis.

Tips

• Try to identify a question you want to answer through writing the paper. You can make this question the title of your paper. Answering this question will result in your thesis.
• Show your research in your writing – include information from primary sources you have used, and cite/quote what other film scholars have written about your chosen topic. However, remember to keep the thesis original and your own.
• Use your chosen film to support your argument and discuss your topic. There should be a good balance between presenting your research, and analyzing the film/s.
• Once you’ve written your paper, read it out loud. You can improve flow by checking your writing this way.