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Dividend Discount Model Calculator

LAST UPDATE: August 26th, 2018

Calculator

What is the Dividend Discount Model?

The DDM (Dividend Discount Model) is a stock valuation method using the present value of future cash flows (such as dividends).

Formula

Dividend Discount Model = Dividends per Share / (Discount Rate – Dividend Growth Rate)

Example

A stock has dividends per share of $1.50. The discount rate is 3.25% and the dividend growth rate is 2.75%.

Dividend Discount Model = $1.50 / (0.0325 – 0.0275) = $1.50 / 0.005 = $300

Therefore, the dividend discount model is $300.

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