💵 Dividend Discount Model Calculator
Estimate a dividend-paying stock’s intrinsic value using the Gordon Growth (constant growth) Dividend Discount Model.
What is the Dividend Discount Model?
The Dividend Discount Model (DDM) values a stock as the present value of all its future expected dividends. This calculator uses the Gordon Growth Model, a simplified version that assumes dividends grow at a single constant rate forever.
The formula
Intrinsic Value = Next Year’s Expected Dividend / (Required Rate of Return – Dividend Growth Rate). This formula only works when the required return is greater than the growth rate; otherwise the model breaks down mathematically, and the calculator will flag this.
This tool is for general educational purposes. The constant-growth assumption is a simplification, real dividend growth varies over time, so use this as one input among several when evaluating a stock, not as standalone investment advice.