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    Present value of growth opportunities

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    Explain how the value of the stock paying dividend is estimated. What is the difference between constant growth dividend and non-constant growth dividend models? What is meant by present value of growth opportunities (PVGO)? The current dividend is $2.00 and is expected to grow 5% indefinitely. What is the value of the company's stock?

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    Solution Preview

    Value of stock paying dividend is estimated by finding the present value of the dividend.

    Cosntant growth dividend means the ...

    Solution Summary

    This provides the steps to calculate the Present value of growth opportunities.

    $2.49

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