The Gordon growth method is an extension of the dividend discount model and assumes that the stream of future dividends grows at a constant rate for an infinite amount of time. The Gordon growth model is good for the valuation of mature companies with a stable history of growth in dividends per share. To implement the model, you need three variables—the expected annual dividend per share for the next year, the required rate of return, and the expected dividend growth rate.
This open-access Excel template is a useful tool for financial analysts, data analysts, and portfolio managers.
Gordon Growth Model is among the topics included in the Equity Investments module of the CFA Level 1 Curriculum. Gain valuable insights into the subject with our Fundamentals of Equity Valuation course.
You can also explore other related templates such as—Dividend Discount Model, Two-Stage Dividend Discount Model, and Free Cash Flow to Equity Valuation Model.