Creating Circular Text
Open a New: Document File > New > Blank Document.

Set the specifications for the document as shown below:
For this activity I want to view my grid so the text will snap to it as I type. Select View > Grid:
Your canvas should now look like this:

FYI: To turn off the Grid you would repeat the step above. It will then take off the check mark beside the name.
Click the Text Tool
, then click on the canvas and type your text. The text options I used is shown below:
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Make sure the Text is Left Aligned.
Click on Image > Rotate > Layer 180 degrees

(this will place the text upside down on the canvas):

Make a copy of the text layer (Layer > Duplicate) and hide the original layer by clicking the eye icon on the layers palette outlined in red below.

Right click on the top layerand slect Simplify Layer.

Select Image > Transform > Free Transform ( Ctrl + T).

On the transform options palette, change the height to 150. This will very depending on the size and style of font you use.
Click the Green Check to accept these settings.
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Click Filter > Distort > Polor Coordinates:
Here is my finished project: