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
Gordon Growth Model Formula
Where:
- $$Dβ$$ = 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. Itβs especially useful for valuing stable, dividend-paying companies.