Because the value of the company is tied very strongly to its growth rate. The present value of a perpetual annuity (to keep things simple) is C/r where C is t

Because the value of the company is tied very strongly to its growth rate. The present value of a perpetual annuity (to keep things simple) is C/r where C is the recurring payment you get, and r is the discount rate (or risk inherent in actually getting C). Think of r as an interest rate- you demand a higher one if you invest in a risky company. Throw in growth and it becomes C/(r-g) where g is the growth rate. As you can see, g is very, very important. Valuing a company is much more complex, but the same basic truth holds - growth is a huge contributor to value.