The formula consists of taking the DPS in the period by (Required Rate of Return – Expected Dividend Growth Rate). For example, the value per share in Year is calculated using the following equation: Value Per Share ($) = $5.15 DPS ÷ (8.0% Ke – 3.0% g) = $103.00 From the com...
What is Gordon's formula? The Gordon Growth Model equation is: P = D1/(R-g) where P is the stock price, D1 is the dividend per share for the next year, R is the required rate of return, and g is the dividend growth rate. The model assumes that dividend growth will continue at...
What is the Gordon Growth Model Formula?Three variables are included in the Gordon Growth Model formula: (1) D1 or the expected annual dividend per share for the following year, (2) k or the required rate of return, and (3) g or the expected dividend growth rate. With these variables...
Formula for Gordon Growth Model The formula used to find out the stock value using Gordon Growth Model is as follows Stock Value (P) = D / (k – G) Where: D= Expected dividend per share one year from now k= required rate of return for equity investor G= Growth rate in dividends...
dividendnonstationarygrowthgordonmodel股利 BISWORKINGPAPERSNo.75–August1999ANOTEONTHEGORDONGROWTHMODELWITHNONSTATIONARYDIVIDENDGROWTHbyHenriPagèsBANKFORINTERNATIONALSETTLEMENTSMonetaryandEconomicDepartmentBasel,SwitzerlandBISWorkingPapersarewrittenbymembersoftheMonetaryandEconomicDepartmentoftheBankforInternationalSettlements,an...