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What is the gordon growth model?

What is the gordon growth model?

The Gordon Growth Model is also known as the dividend discount model (DDM).

It is a model for pricing a stock that was developed by professor Myron J. Gordon in the 1960s. The model uses a stock’s present value relative to the present value of its future dividends to provide an intrinsic value for the stock.

The model is a shaky one at best, especially given that companies these days often change the course of dividend payments, and many (particularly in the tech world) don’t pay any dividends at all.

What is Dividend Growth Rate?
What is the Dividend Discount Model?

Keywords: stocks, dividends, present value, Dividend Discount Model (DDM), intrinsic value, dividend stocks, Gordon Growth Model (GGM), dividend growth rate,