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)both A and B.

Question

Quizplus · Accepted Answer

The present value of growth opportunities (PVGO) is a measure of the value of future growth opportunities that are currently available to a company. Growth stocks often have high PVGO, indicating that investors are optimistic about the company's future growth potential. Past dividend payments and earnings are important factors in the valuation of a stock, but they are not the primary drivers of growth stock values.

A High Proportion of the Value of a Growth Stock