A high proportion of the value of a growth stock typically comes from
A)past dividend payments.
B)past earnings.
C)PVGO (present value of growth opportunities).
D)past dividend payments and past earnings.

Question

Quizplus · Accepted Answer

The present value of growth opportunities (PVGO) refers to the current value of a company's future growth prospects. Growth stocks typically have a high PVGO, which means that a large portion of their value comes from their potential for future growth rather than from their past dividend payments or earnings. Therefore, C is the best choice.

A High Proportion of the Value of a Growth Stock