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Dividend Discount Model Calculator
Value a share from its dividends with the Gordon growth model.
How the Dividend Discount Model Works
The Gordon Growth Formula
D₁ = D₀ × (1 + g)
A share is worth the present value of its future dividends. If those dividends grow at a constant rate g forever and you discount at your required return r, the infinite series simplifies to this single expression.
The r > g Rule
The required return must exceed the growth rate. If g approaches r, the denominator approaches zero and the fair value explodes — a sign the constant-growth assumption has broken down. Use a growth rate no higher than the long-run economy can sustain.
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Where r Comes From
Estimate the required return with the CAPM calculator — risk-free rate plus beta times the equity risk premium.
When to Use a DCF Instead
For companies that reinvest rather than pay out, value the whole cash-flow stream with a DCF rather than dividends alone.
Want deeper insights?
ARIA combines dividend, cash-flow, and risk-based valuation across your portfolio — so you can value income stocks and growth stocks on a consistent footing.
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