Valuation

Gordon Growth Model

Definition

What is Gordon Growth Model?

A constant-growth dividend model dividing next-period dividend by required return minus growth.

Example in practice

A stable company with long-run dividend growth is valued using the Gordon model.

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The price at which an asset could trade in the market at a given time.

An estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power.

An estimate of an asset's appropriate value under specified assumptions or accounting standards.

Present value of expected cash inflows minus present value of expected cash outflows.

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