Intrinsic Value Calculation Using Gordon Growth Model

Easy Equity Valuation Applications Discounted Dividend Valuation

Consider a company that is expected to pay a dividend of $2 per share next year. Dividends are expected to grow at a rate of 5% per year indefinitely. If the required rate of return for investors in this stock is 10%, what is the intrinsic value of the stock using the Gordon Growth Model?

$40.00