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Gordon Growth Model Calculator

This Gordon Growth Model Calculator helps you estimate the fair value of a stock based on expected dividends, required rate of return, and dividend growth rate.

Stock Valuation Using Gordon Growth Model

Input Fields
D1
$
Enter the expected dividend for next year
r
%
Enter the required rate of return
g
%
Enter the constant growth rate of dividends
If enabled, the result will update automatically when you change any value.

Gordon Growth Model Formula

Formula
$$\text{Stock Price} = \frac{D_1}{r – g}$$

Where:

  • $$D₁$$ = Expected dividend in the next period
  • $$r$$ = Required rate of return (as decimal)
  • $$g$$ = Dividend growth rate (as decimal)
  • $$Stock Price$$ = Estimated fair stock price


The Gordon Growth Model (also known as the Dividend Discount Model) is a simple and widely used valuation method for estimating a stock’s fair value based on future dividends that grow at a constant rate. It’s especially useful for valuing stable, dividend-paying companies.

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