Dividend Discount Model Calculator
Value a share with the Gordon growth model, next year's dividend divided by your required return minus the dividend growth rate.
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- No sign-up
Enter the dividend and rates to see the value.
Worked example
With these example inputs:
- Next year's dividend$3
- Required return9%
- Dividend growth rate4%
Intrinsic value: $64.00
- Next dividend$3.20
- Return minus growth5.0%
Frequently asked questions
What is the dividend discount model?
It values a share as the present value of its future dividends. The Gordon growth version assumes dividends grow at a steady rate forever.
Why must the required return exceed growth?
If growth equals or exceeds the required return, the formula gives an infinite or negative value, which is not meaningful. The model only works when return is higher than growth.