Arguably the most important questions an investor must ask is: “How much is the stock actually worth?” There are many methods to answer this question. One popular method is the Gordon Growth Model.

Investors buy stocks to participate in the growth of a company. Many stocks reward investors with dividend payments, but how do you know whether you’re paying more for a stock than what it is worth?

The formula for DYM draws on the frameworks of the Gordon Growth Model and Dividend Discount Model, which boils down to taking the current dividend yield and adding a growth estimate. The assumption ...

Discover how the Multistage Dividend Discount Model uses varying growth rates to value stocks, including blue-chip companies, throughout different business cycles.