Dividend Discount Model Calculator
Value a perpetual growing dividend stream and examine growth and required-return sensitivity.
Results
Review or adjust your inputs, then calculate to see your results and interpretation.
Understand this calculation
A higher required return lowers present value; valuation becomes highly sensitive as growth approaches the discount rate. This is not a guaranteed target price.
See calculation method and assumptions
Formula
Dividend Discount Model
Next-period dividend
Perpetual constant-growth value
Requires r > g and g > −100%. Assumes perpetual constant growth and stable dividends; unsuitable for non-dividend or transitional firms. Match currency and annual periods.
Variables, rates and periods
- D₀ / D₁
- Current / next dividend per share.
- r / g
- Annual required return / perpetual annual growth, as decimals.
Scope and assumptions
- Requires r > g and g > −100%.
- Assumes perpetual constant growth and stable dividends;
- unsuitable for non-dividend or transitional firms.
- Match currency and annual periods.
Value a perpetual growing dividend stream and examine growth and required-return sensitivity.
Worked example
- D₀ = 3, g = 3%, r = 9%: D₁ = 3.09 and value = 51.50.
- Change inputs and calculate again to compare assumptions.
Frequently asked questions
Is the result guaranteed?
Requires r > g and g > −100%. Assumes perpetual constant growth and stable dividends; unsuitable for non-dividend or transitional firms. Match currency and annual periods.
Does the example represent actual markets?
No. All examples are hypothetical and contain no live market data.