Dividend Discount Model (DDM)
Calculate Dividend Discount Model (DDM) instantly with the exact formula and a worked example.
Dividend Discount Model (DDM)
Dividend
Height%
Discount rate%
Price (Gordon)
73.5714
More about: Dividend Discount Model (DDM)
What it calculates
The “Dividend Discount Model (DDM)” calculator computes Price (Gordon) from 3 parameters: dividend, height (%), discount rate (%).
Used by investors to estimate returns, project savings, and analyze a portfolio.
Example calculation
With parameters Dividend = 5, Height = 3 %, Discount rate = 10 % the result is 73.57.
How to use
- Enter dividend, height and discount rate — each field above is adjustable with a slider.
- Price (Gordon) is calculated automatically as you type.
- Check the worked example below to see the formula applied to real numbers.
- Copy the result or bookmark this calculator.
Related calculators
FAQ
What is compound interest?
Compound interest means you earn returns not only on your original principal but also on previously earned interest. Formula: A = P · (1 + r/n)^(n·t). Over long periods this produces exponential growth.
How much do regular contributions matter?
A lot. Adding a fixed amount every month and reinvesting earnings dramatically increases the final value, especially over 20–30 years, because each contribution compounds for the remaining term.
What is the Rule of 72?
A quick estimate for doubling time: years ≈ 72 / annual return %. At 8% your money doubles in about 9 years; at 12%, in about 6 years.
What return rate should I assume?
Historically the S&P 500 has returned about 10% per year before inflation (around 7% after). Use a conservative figure for planning and remember that past performance does not guarantee future results.
More calculators in this category
Explore related free tools