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Definition of Growth opportunity
opportunity to invest in profitable projects.
Also called the Gordon-Shapiro model, an application of the dividend discount
A model wherein dividends are assumed to be at a constant rate in perpetuity.
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
A phase of development in which a company experiences rapid earnings growth as it produces
Compound annual growth rate for the number of full fiscal years shown. If there is a negative
Common stock of a company that has an opportunity to invest money and earn more than the
Maximum rate a firm can expand without outside source of funding. growth generated
A model valuing a firm in which net present value of new
Expected return that is foregone by investing in a project rather than in
The difference in the performance of an actual investment and a desired investment
The possible expected return and standard deviation pairs of all portfolios that can be
The expected return/standard deviation pairs of all portfolios that can be
Net present value of investments the firm is expected to make
A method of calculating the growth rate by relating the terminal value to
Maximum rate of growth a firm can sustain without increasing financial leverage.
The lost opportunity of not doing something, which may be financial or non-financial, e.g. time.
dividend growth method
a method of computing the cost
an estimate of the increase expected in dividends
a potential benefit that is foregone because
opportunity cost of capital
the highest rate of return that
Lost revenue that would otherwise have been realized if a different
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
internal growth rate
Maximum rate of growth without external financing.
opportunity cost of capital
Expected rate of return given up by investing in a project.
Benefit or cash flow forgone as a result of an action.
present value of growth opportunities (PVGO)
Net present value of a firm’s future investments.
sustainable growth rate
Steady rate at which a firm can grow without changing leverage; plowback ratio × return on equity.
The forgone value of an alternative not chosen, usually the most profitable alternative.
Personal Responsibility and Work Opportunity Reconciliation Act
A federal Act requiring the reporting of new hires into a national database.
Critical Growth Periods
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
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