Money Tools

Gordon Growth Calculator

Estimate dividend-based intrinsic value with the Gordon Growth Model.

Updated April 14, 2026
Free online tool
Planning and research use

Why this page exists

Dividend valuation gets easier to compare when next dividend, required return, and growth assumptions turn into one simple intrinsic-value estimate. This calculator helps visitors estimate a Gordon Growth value from a next annual dividend, required return, and perpetual growth rate.

Interactive tool

Run the estimate

Enter your numbers and read the result first, then use the sections below to understand what affects the outcome.

Calculator

Gordon growth calculator

Estimate a simple dividend-based intrinsic value using the Gordon Growth Model.

Result

$40.00

Estimated intrinsic value based on next annual dividend divided by the spread between required return and perpetual growth.

Estimated intrinsic value$40.00

Dividend used$2.40

Required return used10.00%

Growth rate used4.00%

Return-growth spread6.00%

$2.40 of next annual dividend divided by a 6.00% spread between required return and growth gives an intrinsic-value estimate near $40.00.
Small changes in the return-growth spread can move the valuation sharply, which is why the result is so assumption-sensitive.
Use the result as a simple screening estimate only, because real valuation work usually needs additional assumptions, scenarios, and business context.

This is a simplified valuation model, not investing advice. The result is very sensitive to the required-return and growth-rate assumptions entered.

Planning note

Last updated April 14, 2026. Use this tool to compare scenarios and plan ahead, then confirm important details with the lender, employer, insurer, contractor, or other qualified provider involved in the final decision.

How it works

What the calculator is doing

Enter the next annual dividend, required rate of return, and perpetual dividend growth rate.

The calculator divides the dividend by the spread between required return and growth.

It shows the resulting intrinsic-value estimate and the assumptions used.

Understanding your result

This is a simplified valuation model, not investment advice. The result is especially sensitive when the required return and growth rate are close together.

Browse more money tools

Examples

Ways people use this tool

Example scenarios help turn a quick estimate into a more useful comparison or planning step.

Test one dividend-growth valuation view

A simple Gordon Growth estimate can help turn a dividend idea into one comparable value number.

Compare a more conservative and aggressive assumption set

Changing the required return or growth rate can show how quickly the estimate moves with different expectations.

Use it beside other valuation tools

Dividend-based value estimates often make more sense next to yield, growth, and earnings ratios.

FAQ

Common questions

What formula does the Gordon Growth calculator use?

It divides the next annual dividend by the difference between required return and perpetual dividend growth rate.

Why does the spread between return and growth matter so much?

When the spread gets very small, the valuation result changes sharply, which is why the model is so sensitive to assumptions.

When does this model stop being usable?

The model breaks down when the growth rate is equal to or above the required return, because the denominator no longer supports a stable estimate.

Related tools

Keep comparing

Use these related tools to compare nearby scenarios, check a second estimate, or keep narrowing down the right decision.

Money ToolsUpdated April 11, 2026