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Gordon Constant-Growth Stock Intrinsic Value Calculator

P₀ = D₁ / (r − g) — Gordon growth model.

Compute the intrinsic value of a dividend-paying stock under the Gordon constant-growth assumption: P₀ = D₁ / (r − g), where D₁ is next year's expected dividend, r is the required rate of return, and g is the constant growth rate of dividends. Requires r > g for a finite, sensible value.

Nadia Almasri By Nadia Almasri
Published Last reviewed 1 min read

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  1. Fill in the inputs above using the units you already have.
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  3. Hover any result row for the underlying formula and intermediate values.

Formula

P₀ = D₁ / (r − g).

In depth

Compute the intrinsic value of a dividend-paying stock under the Gordon constant-growth assumption: P₀ = D₁ / (r − g), where D₁ is next year's expected dividend, r is the required rate of return, and g is the constant growth rate of dividends. Requires r > g for a finite, sensible value.