Dividend growth model


Also found in: Acronyms.

Dividend growth model

An approach that assumes dividends grow at a constant rate in perpetuity. The value of the stock equals next year's dividends divided by the difference between the required rate of return and the assumed constant growth rate in dividends.
References in periodicals archive ?
These targets continue to support our dividend growth model and share repurchase initiatives while also demonstrating our confidence in our ability to successfully manage our efficiency programmes and growth-focussed investments in a highly competitive industry.
Assuming normally distributed shocks, the likelihood functions for the two models are very similar, with a slight advantage in favor of the nonstationary real dividend growth model.
There are also methods based on the dividend growth model of Gordon (1962), or classic fundamental analysis.
Other methods, particularly the dividend growth model, were ignored, as were the possible differences that occur between CAPM and dividend growth.
Cho (1988) explores the relationship between firm value and risk management activities using Gordon's Constant Dividend Growth Model.