DDM - Stable Growth
What the inputs mean:
• Stable Growth Rate – your best guess at the long‑term annual growth rate of the dividend.
• Cost of Equity – the return investors expect for holding the stock.
• Next Year Dividend (Div₁) – dividend expected in the next year.
About this method: The Stable Growth model values a stock as the sum of all future dividends, growing steadily at your Stable Growth rate and discounted by your Cost of Equity. Best suited for companies growing at a rate equal to or lower than the economy growth rate with well-established dividend payout policies and higher payout ratios.
• Stable Growth Rate – your best guess at the long‑term annual growth rate of the dividend.
• Cost of Equity – the return investors expect for holding the stock.
• Next Year Dividend (Div₁) – dividend expected in the next year.
About this method: The Stable Growth model values a stock as the sum of all future dividends, growing steadily at your Stable Growth rate and discounted by your Cost of Equity. Best suited for companies growing at a rate equal to or lower than the economy growth rate with well-established dividend payout policies and higher payout ratios.
Monte Carlo Simulation – explore uncertainty and see how outcomes are distributed.