Gordon Growth Model

The Gordon Growth Model (also dividend growth model or dividend discount model ) is a financial model named after Myron J. Gordon for calculating the value of an investment assuming a constant growth in dividends . It is one of the discounted cash flow method of business valuation and is a commonly used method for calculating the final value of an investment.

calculation

The value of an investment is calculated using the Gordon Growth Model:

${\displaystyle {\text{Wert}}={\frac {\text{Dividende}}{r-g}}}$

It denotes the discount rate and the perpetual growth rate . ${\displaystyle r}$ ${\displaystyle g}$

See also

• Eternal annuity
• Final value
• Discounted cash flow

Individual evidence

1. ↑ MJ Gordon - The Review of Economics and Statistics, Vol. 41, No. 2, Part 1 (May, 1959), pp. 99–105 ( Memento of the original from January 17, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 1.4 MB)  
2. ↑ The dividend discount model. In: hans-markus.de. Dr.-Ing. Hans-Markus Callsen-Bracker, accessed on July 17, 2015 .