Two firms is more attractive based on their peg ratios

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Reference no: EM131568125

Two potential acquisition candidates, AJAX and COMET, exhibit price to cash flow ratios of 7 and 5, respectively. AJAX’s cash flows per share are expected to grow at a 13% annual rate and COMET’s at a more modest 11% rate. AJAX’s current cash flow per share is $6, and COMET’s is $7. Which of the two firms is more attractive based on their PEG ratios? Make sure to show your work below.

Reference no: EM131568125

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