📐 Dividend Discount Model Calculator
Estimate intrinsic value from dividends
How to Use This Calculator
1
Enter D0
Provide the current annual dividend per share.
2
Enter rates
Provide growth rate g and discount rate r (in %).
3
Calculate
Get the intrinsic value using the Gordon Growth model.
Formula
P₀ = D₁ / (r − g), where D₁ = D₀ × (1 + g)
Constraint: r > g
Example: D0=$2.00, g=3%, r=8% → D1=$2.06 → P0=$41.20
About DDM
The Dividend Discount Model values a stock as the present value of future dividends assuming a constant growth rate.
Tips
- Use sustainable long-term growth rates (typically below GDP growth)
- r and g must be consistent (both nominal, same currency)
- Not suitable for non-dividend or irregular dividend stocks
Frequently Asked Questions
What if r ≤ g?
The model breaks down mathematically; choose inputs where r > g.
Can I enter D1 directly?
Yes—enter D0 and g so the tool computes D1 for you.
Does this handle multi-stage growth?
No. This is the single-stage (Gordon Growth) version.