What this intrinsic value calculator does
This calculator shows the intrinsic value per share. You enter the next dividend, your required return, and the growth. The tool then uses the dividend discount model. So you see what a share is worth. It also shows the return minus growth. The result uses the currency you choose.
What intrinsic value is
Intrinsic value is a share's fair worth. It is based on the cash it pays out. So it ignores the daily market price. A share can trade above or below it. Value investors hunt for that gap. This tool gives a simple estimate.
How it is calculated
The tool takes the next dividend. It divides it by the return minus the growth. So a smaller gap gives a higher value. A bigger dividend gives a higher value. The result is your intrinsic value per share. The calculator does this for you.
What the result tells you
The result shows your intrinsic value per share. A two dividend, an eight percent return, and three percent growth give forty. A higher dividend lifts it. A smaller gap lifts it too. So it shows a fair price to pay. It is just a close estimate.
The next dividend
Your next dividend is the payout you expect next. It is the dividend one year out. A bigger dividend lifts the value. So this number sets the base. Use the next expected dividend per share. It drives the entire result here. Enter your next dividend.
The required return
Your required return is the yearly return you want. It is your hurdle rate for the share. A higher required return lowers the value. So this number raises the bar. Use the return you need to take the risk. It reflects how risky the share is. Enter your required return.
The dividend growth
Your dividend growth is how fast the payout grows. It is the yearly rise in the dividend. Faster growth lifts the value. So this number narrows the gap. Use a steady long-term growth rate. It must stay below the required return. Enter your dividend growth.
The return minus growth
The tool also shows the return minus growth. It is the gap that divides the dividend. Here it comes to five percent. So a smaller gap gives a bigger value. The value jumps as the gap shrinks. It must stay above zero.
Limits of the model
The model assumes a steady growth forever. Real dividends are rarely so smooth. So treat the result as a rough guide. It only works for dividend-paying shares. Growth above the return breaks the math. Use it alongside other measures.
How to use it
Enter your next dividend first. Add the required return and growth. Read the intrinsic value in your currency. Then compare it to the market price. Try a different growth rate. Test a higher return. Use it to judge a share.
A final tip
Use this to estimate a fair price for a share. Remember it leans on your own inputs. A small change in the gap moves it a lot. It suits stable, dividend-paying firms best. Always cross-check with other tools. Do not treat it as a sure value. It is a guide, not a guarantee.