Dividend discount model

GPTKB entity

Statements (23)
Predicate Object
gptkbp:instanceOf gptkb:financial_technology
gptkbp:alsoKnownAs gptkb:DDM
gptkbp:appliesTo dividend-paying companies
gptkbp:assumes efficient markets
constant required rate of return
dividends grow at a constant rate
gptkbp:basedOn present value of future dividends
gptkbp:category equity valuation
gptkbp:firstPublished 1956
gptkbp:form P = D1 / (r - g)
https://www.w3.org/2000/01/rdf-schema#label Dividend discount model
gptkbp:limitation not suitable for non-dividend stocks
gptkbp:originatedIn Eli Shapiro
Myron J. Gordon
gptkbp:type Gordon growth model
multi-stage DDM
gptkbp:usedFor valuing stocks
gptkbp:variant D1 (expected dividend next period)
P (stock price)
g (dividend growth rate)
r (required rate of return)
gptkbp:bfsParent gptkb:Common_stock
gptkbp:bfsLayer 7