Dividend Discount Model

Calculate stock value using dividend discount model.

Dividend Discount Model Calculator

Current Annual Dividend ($)

Dividend Growth Rate (%)

Required Rate of Return (%)

Model Type

Valuation Results

Stock Value

Next Year Dividend

Dividend Yield

Valuation Breakdown

Formula Used:

About Dividend Discount Models

Gordon Growth Model

The simplest DDM assuming constant dividend growth forever.

P = D₁ ÷ (r - g)

Two-Stage Model

Accounts for different growth rates in two distinct periods.

P = PV(Stage 1) + PV(Stage 2)

Key Assumptions

• Company pays regular dividends
• Required return must be greater than growth rate
• Growth rate should be sustainable long-term
• Model works best for mature, dividend-paying companies

Limitations

• Not suitable for non-dividend paying stocks
• Sensitive to growth rate and required return assumptions
• May not reflect market sentiment or other factors

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