Generally speaking, as a firm progresses through the industry life cycle, you would expect the PVGO to ________ as a percentage of share price.

Question

Quizplus · Accepted Answer

As the industry matures, the PVGO tends to decrease as growth opportunities become limited and earnings become more predictable. This leads to a decrease in the premium that investors are willing to pay for future growth prospects, leading to a decrease in the percentage of share price represented by PVGO.

Generally Speaking, as a Firm Progresses Through the Industry Life