Currency:
Dividend Discount Model
Price per share
Possible Upside/Downside
Intrinsic Value
Not applicable
Open the DCFHow the value is built
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Model
Assumptions
Grey values come straight from the company's dividends and the market; anything you change turns gold and is remembered for this ticker.
Dividends & growth
$
%
%
%
Keep it at or below long-run GDP growth (2–3%).
yrs
yrs
Growth falls in a straight line from gS to gL over these years.
yrs
Growth fades in a straight line from gS to gL over 2H years. Automatic: half of N.
Required return (CAPM)
%
×
%
%
Leave empty to discount at the cost of equity.
All five models
Value per share with your inputs. Click one to use it.
Projected dividends
Sensitivity
Value per share for other required returns (rows) and long-run growth rates (columns).
How the dividend discount model works
- D0 is the dividend per share paid over the last twelve months (ex-dividend dates already passed), from the company's dividend history. Split-adjusted.
- Required return r = risk-free rate + beta × (market return − risk-free rate), with adjusted beta (0.67 × raw beta + 0.33), the same cost of equity as the DCF.
- Constant growth (Gordon): P0 = D1 ÷ (r − g), with D1 = D0 × (1 + g).
- Constant growth with a terminal value: the next N dividends discounted one by one, plus the Gordon price at year N (P_N = D_N+1 ÷ (r − g)) discounted N years. With the same g it gives exactly the Gordon value.
- Two-stage: dividends grow at gS for N years, then at gL forever; the terminal value at year N is D_N × (1 + gL) ÷ (r − gL).
- H-Model: P0 = D0 × (1 + gL) ÷ (r − gL) + D0 × H × (gS − gL) ÷ (r − gL). The first part is the stable company; the second is the value of the extra growth, which fades in a straight line over 2H years.
- Three-stage: gS for N years, a straight-line fade to gL over N2 years, then gL forever.
- The dividend is valued as of today and D1 arrives in one year. r must be above the long-run growth, otherwise the value is infinite.