Gordon Growth Model Calculator
Risk Factor =
Dividend Growth Rate =
Stock Price =
Gordon's growth model is a way of measuring the market's perceived riskiness of a given stock. It assumes the dividend stream is perpetual and that the long-term growth rate is constant.
- Risk Factor%: discount rate associated with riskiness of the stock (the higher the percentage, the higher the market's perceived risk)
- Dividend: current dividend amount for the stock
- Dividend Growth Rate%: estimated dividend growth rate expressed as a percentage
- Stock Price: current price of the stock
A stock currently trading at $75 per share has a $4.25 dividend that is growing at 5% per year. What is the riskiness of this stock?
- Dividend: 4.25
- Dividend Growth Rate%: 5.000
- Stock Price: 75.00
The risk factor is 10.95%.
Dividend Growth Rate