Present value of growth opportunities separates a share price from the value of no-growth earnings.
PVGO Calculator
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PVGO
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Table of Contents
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What is PVGO Calculator?
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How to Use This Calculator
- Enter or select Earnings, Number of shares outstanding, Share price, Cost of equity.
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
PVGO = price per share−EPS/cost of equity
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Variables Explained
| Input | What it means |
|---|---|
| Earnings | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Number of shares outstanding | The share count corresponding to the stated price or earnings period. |
| Share price | The stated purchase or selling amount, in the same currency as the related costs. |
| Cost of equity | The shareholder funding or residual ownership value used in the selected ratio. |
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Worked Example
Price 50, EPS 4 and cost of equity 10% imply PVGO=10.
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Why Use This Calculator?
Compare the result with the underlying statement, budget or proposed transaction. It is most useful when every amount uses the same reporting period and the same accounting definition.
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Common Mistakes
- This is a simplified valuation model; the discount rate must be entered consistently.
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Frequently Asked Questions
Should I use monthly or annual figures?
Use one consistent period for every amount and rate in the relationship. If a form specifies an annual rate or a monthly amount, follow that label rather than mixing time periods.
Does the result include fees and tax?
Only the costs and taxes represented by the inputs and formula are included. A real transaction can include other charges, so compare the estimate with the underlying agreement or statement.
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Sources & References
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