{"success":true,"version":"v1","request":{"tool":"get_calculator_schema","calculator_id":"gordon-growth"},"result":{"entity_type":"calculator","id":"gordon-growth","calculator_id":"gordon-growth","canonical_url":"https://tttkmbb.com/investing/gordon-growth","name":"Gordon Growth Model Calculator","title":"Gordon Growth Model Calculator – Dividend Discount Intrinsic Value and Implied Return","category":"investing","category_name":"Investing & Real Estate","tool_name":"calculate_gordon_growth_value","featured_mcp_tool":false,"description":"Values a stock as the next dividend divided by the required return minus the dividend growth rate (Gordon growth model), and when a price is given, reports the implied return and whether the price is above or below the intrinsic value.","use_when":"You want an intrinsic value for a stable, dividend-paying stock from its dividend, expected growth and required return, or the return implied by its current price.","do_not_use_when":"The company pays no dividend, growth is not constant (use dcf-valuation) or growth is at or above the required return. Informational only; not financial advice.","inputs":[{"name":"next_dividend","label":"Next dividend (D1)","type":"number","required":false,"max":1000000,"exclusive_min":0,"description":"Expected dividend per share over the coming year; takes precedence over current_dividend.","example":2.06},{"name":"current_dividend","label":"Current dividend (D0)","type":"number","required":false,"max":1000000,"exclusive_min":0,"description":"Most recent annual dividend per share; D1 = D0 × (1 + g) when next_dividend is omitted.","example":2},{"name":"required_return_percent","label":"Required return","type":"number","unit":"% per year","required":true,"max":100,"exclusive_min":0,"description":"Investor's required rate of return (cost of equity) in percent.","example":8},{"name":"growth_percent","label":"Dividend growth","type":"number","unit":"% per year","required":true,"min":-50,"max":100,"description":"Constant annual dividend growth rate in percent; must be below the required return.","example":3},{"name":"current_price","label":"Current share price","type":"number","required":false,"max":10000000,"exclusive_min":0,"description":"Optional market price, used for the implied return and the over/under-valuation check.","example":45}],"outputs":[{"name":"intrinsic_value","label":"Intrinsic value per share","type":"number","decimals":2,"description":"D1 / (r − g)."},{"name":"dividend_used","label":"Next dividend used (D1)","type":"number","decimals":4,"description":"next_dividend, or current_dividend × (1 + g)."},{"name":"implied_return_percent","label":"Implied return at current price","type":"number","unit":"%","decimals":2,"description":"D1 / current_price + g (only when current_price is given)."},{"name":"over_under_valued","label":"Price versus intrinsic value","type":"string","decimals":4,"description":"Whether the current price is above or below the model value and by what percentage (only when current_price is given)."}],"input_schema":{"type":"object","properties":{"next_dividend":{"description":"Expected dividend per share over the coming year; takes precedence over current_dividend.","type":"number","maximum":1000000,"exclusiveMinimum":0,"examples":[2.06]},"current_dividend":{"description":"Most recent annual dividend per share; D1 = D0 × (1 + g) when next_dividend is omitted.","type":"number","maximum":1000000,"exclusiveMinimum":0,"examples":[2]},"required_return_percent":{"description":"Investor's required rate of return (cost of equity) in percent. Unit: % per year.","type":"number","maximum":100,"exclusiveMinimum":0,"examples":[8],"x-unit":"% per year"},"growth_percent":{"description":"Constant annual dividend growth rate in percent; must be below the required return. Unit: % per year.","type":"number","minimum":-50,"maximum":100,"examples":[3],"x-unit":"% per year"},"current_price":{"description":"Optional market price, used for the implied return and the over/under-valuation check.","type":"number","maximum":10000000,"exclusiveMinimum":0,"examples":[45]}},"additionalProperties":false,"required":["required_return_percent","growth_percent"]},"output_schema":{"type":"object","properties":{"intrinsic_value":{"description":"D1 / (r − g).","type":"number"},"dividend_used":{"description":"next_dividend, or current_dividend × (1 + g).","type":"number"},"implied_return_percent":{"description":"D1 / current_price + g (only when current_price is given). Unit: %.","type":"number","x-unit":"%"},"over_under_valued":{"description":"Whether the current price is above or below the model value and by what percentage (only when current_price is given).","type":"string"}}},"formula":"D1 = next_dividend or current_dividend × (1 + g); intrinsic_value = D1 / (r − g); implied_return = D1 / current_price + g, with r = required_return_percent/100 and g = growth_percent/100","method":"Gordon growth (constant-growth dividend discount) model: the value of a perpetuity growing at g discounted at r, valid only for g < r. Results are very sensitive to r − g. Informational mathematics only; not financial advice.","sources":[{"name":"Wikipedia – Dividend discount model","url":"https://en.wikipedia.org/wiki/Dividend_discount_model","type":"reference","retrieved_at":"2026-09-24"}],"freshness":{"type":"static","max_age_seconds":null,"note":"Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output."},"examples":[{"name":"D1 2, required 8 %, growth 3 %","inputs":{"next_dividend":2,"required_return_percent":8,"growth_percent":3},"expected":{"intrinsic_value":40,"dividend_used":2},"url":"https://tttkmbb.com/api/v1/calculate/gordon-growth?next_dividend=2&required_return_percent=8&growth_percent=3"},{"name":"D0 2, growth 3 %, required 8 %, price 45","inputs":{"current_dividend":2,"required_return_percent":8,"growth_percent":3,"current_price":45},"expected":{"intrinsic_value":41.2,"dividend_used":2.06,"implied_return_percent":7.58,"over_under_valued":"Overvalued: price 45.00 is 9.22 % above the model value 41.20"},"url":"https://tttkmbb.com/api/v1/calculate/gordon-growth?current_dividend=2&required_return_percent=8&growth_percent=3&current_price=45"}],"faq":[{"q":"Should I enter D0 or D1?","a":"Enter the dividend you know. The model needs next year's dividend D1; if you enter the last paid dividend D0, it is grown one year: D1 = D0 × (1 + g)."},{"q":"Why does a small change in growth move the value so much?","a":"The denominator is r − g. With r = 8 % and g = 3 % it is 5 %; raising g to 4 % shrinks it to 4 % and raises the value by 25 %."}],"tags":["gordon growth model","dividend discount model","intrinsic value","dividend valuation","implied return"],"related":[{"calculator_id":"dividend-yield","reason":"Yield and income of the same dividend stream."},{"calculator_id":"dcf-valuation","reason":"Two-stage valuation when growth is not constant."},{"calculator_id":"capm","reason":"Estimate the required return from beta."}],"links":{"html":"https://tttkmbb.com/investing/gordon-growth","markdown":"https://tttkmbb.com/investing/gordon-growth.md","json":"https://tttkmbb.com/investing/gordon-growth.json","api":"https://tttkmbb.com/api/v1/calculate/gordon-growth","schema":"https://tttkmbb.com/api/v1/calculators/gordon-growth","openapi":"https://tttkmbb.com/openapi.json","mcp":"https://tttkmbb.com/mcp"},"version":"v1","updated_at":"2026-09-24"},"timestamp":"2026-09-24T03:49:55Z"}