Dividend Discount Model (Gordon Growth)
Intrinsic value of a dividend payer from the Gordon growth model — and the growth the current price implies.
Formula
Gordon growth is beautifully simple and brutally sensitive — r and g sit in the denominator, so a 1% change in either swings value 20%+. It only fits stable, mature dividend payers (utilities, consumer staples). The implied-growth reverse is often the more useful output: is the market's embedded assumption reasonable?
Not financial advice — for informational and analytical use only. Verify all figures with a qualified professional before acting on them.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
Need dividend discount model results fast? Analysts, founders, traders and finance professionals use the Dividend Discount Model to skip the spreadsheet and get a defensible answer in one step — free, private and instant.
About Dividend Discount Model (Gordon Growth)
Intrinsic value of a dividend payer from the Gordon growth model — and the growth the current price implies. Gordon growth is beautifully simple and brutally sensitive — r and g sit in the denominator, so a 1% change in either swings value 20%+. It only fits stable, mature dividend payers (utilities, consumer staples). The implied-growth reverse is often the more useful output: is the market's embedded assumption reasonable? The governing relationship is V = D₁ / (r − g). The Dividend Discount Model computes entirely in your browser — free, private (your figures never leave your device) and instant, recalculating live as you change any input.
How to use Dividend Discount Model (Gordon Growth)
- 1Enter Next-year dividend/share (currency), Dividend growth (perpetual) (%), Required return (%), Current price (currency) into the Dividend Discount Model.
- 2The result is computed automatically using V = D₁ / (r − g) — there is no button to press.
- 3Change any input to model a different scenario, then copy or share the result.
Why use Dividend Discount Model (Gordon Growth)?
- ✓Computes dividend discount model instantly with the correct formula — no spreadsheet needed
- ✓100% free and unlimited, with no sign-up, login or paywall
- ✓Runs entirely in your browser, so the figures you enter stay private
- ✓Shows the formula, a live worked example and references so you can defend the number
Frequently asked questions
What is the formula behind the Dividend Discount Model?+
Dividend Discount Model uses V = D₁ / (r − g). Gordon growth is beautifully simple and brutally sensitive — r and g sit in the denominator, so a 1% change in either swings value 20%+. The tool substitutes your actual inputs into this relationship and shows the worked example step by step.
What inputs does the Dividend Discount Model need?+
Enter Next-year dividend/share (currency), Dividend growth (perpetual) (%), Required return (%), Current price (currency) and the result updates immediately — there is no button to press. Change any value to model a different scenario in real time.
Is the Dividend Discount Model free, and is my data private?+
Yes — it is completely free with no sign-up or usage limit, and it runs entirely in your browser, so the numbers you enter are never uploaded or stored on any server. It is for informational and analytical use, not financial advice.
What should I watch out for when using the Dividend Discount Model?+
It only fits stable, mature dividend payers (utilities, consumer staples). The implied-growth reverse is often the more useful output: is the market's embedded assumption reasonable?
What is the Dividend Discount Model based on?+
The method follows authoritative sources: Gordon (1959); Williams — dividend discount model. The formula and references are shown on the page so you can verify and cite the result.
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