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Dividend Discount Model Calculator
Result
Chart
Show formula & working
Gordon: Value = D₁ ÷ (k − g), D₁ = D₀ × (1 + g)
Multi-stage: Value = Σ Dt ÷ (1 + k)t over the growth stages + [DN+1 ÷ (k − g)] ÷ (1 + k)N
Details
How this works
A share is worth the present value of the dividends it will pay. When dividends grow at a steady rate forever, that sum has a simple closed form — the Gordon growth model.
Companies often grow fast before settling down; two-stage and multi-stage models allow for that, then switch to a long-term rate.
Frequently asked questions
Which companies does DDM suit?
Mature companies with steady, predictable dividends — utilities, large banks, consumer staples. It undervalues companies that pay little and reinvest heavily.
Why does the value change so much?
Because k − g is in the denominator. A 1% change in either can move the value by a large amount.