Personal finance learning tool
Dividend Growth Model Calculator
Estimate an illustrative share value from next year's dividend, required return and perpetual growth.
Inputs and results stay in this browser. Currency symbols are illustrative; use any consistent currency.
Understand Dividend growth model
One idea, three depths
Choose how deeply to explain Dividend growth model
Dividend growth model: Estimate an illustrative share value from next year's dividend, required return and perpetual growth.
Age 5Explain it to a 5-year-oldStart with a picture
Imagine using Dividend growth model to answer this question: estimate an illustrative share value from next year's dividend, required return and perpetual growth? Enter Expected dividend next year, Required annual return, Perpetual dividend growth, and 1 other input; the calculator shows Illustrative intrinsic value. Try changing one number and watch what happens to Illustrative intrinsic value. The answer tells you Illustrative intrinsic value.
Age 15Explain it to a 15-year-oldConnect it to the formula
The Gordon model is highly sensitive to its assumptions and is meaningful only when required return exceeds sustainable growth. The rule is Estimated value = next dividend ÷ (required return − dividend growth). Its input values are Expected dividend next year, Required annual return (%), Perpetual dividend growth (%), Current share price, and the main result is Illustrative intrinsic value. Try changing one number and watch what happens to Illustrative intrinsic value.
CollegeExplain it at college levelState the model precisely
This calculator evaluates a personal-finance model from stated cash amounts, rates and time assumptions. The implemented relation is Estimated value = next dividend ÷ (required return − dividend growth), evaluated from Expected dividend next year, Required annual return (%), Perpetual dividend growth (%), Current share price to produce Illustrative intrinsic value. The Gordon model is highly sensitive to its assumptions and is meaningful only when required return exceeds sustainable growth. The result cannot predict markets or include unentered taxes, fees, legal rules, benefits, insurance terms or personal circumstances. Verify material decisions against current documents.
What this personal finance tool does
Estimate an illustrative share value from next year's dividend, required return and perpetual growth.
Why the relationship works
The Gordon model is highly sensitive to its assumptions and is meaningful only when required return exceeds sustainable growth.
The formula
Estimated value = next dividend ÷ (required return − dividend growth)
Inputs and time periods
This model uses Expected dividend next year, Required annual return, Perpetual dividend growth, Current share price. Keep currencies and time periods consistent, and distinguish current known amounts from assumptions about future rates.
What the result means
The primary output is Illustrative intrinsic value; supporting outputs include Value minus current price, Implied value difference. Compare scenarios by changing one input at a time.
Limits of this compact model
This educational calculator cannot predict markets or account for every tax, fee, legal rule, benefit, insurance policy or personal circumstance. Verify material decisions with current documents and qualified advice.
Supporting sourcesAcademic referencesPrimary standards, textbooks and complete citations
Standards, reading and academic references
Use the calculator as the worked interaction, then consult the primary standards and academic textbooks listed below. MW SysArc links to the original sources; the explanation on this page is original and does not reproduce them.
Principles of Finance
Read the free OpenStax finance textbookCite this book
- APA 7
- Dahlquist, J., & Knight, R. (2022). Principles of finance. OpenStax. https://openstax.org/books/principles-finance/pages/1-why-it-matters
- MLA 9
- Dahlquist, Julie, and Rainford Knight. Principles of Finance. OpenStax, 2022, https://openstax.org/books/principles-finance/pages/1-why-it-matters.
- Chicago author-date
- Dahlquist, Julie, and Rainford Knight. 2022. Principles of Finance. Houston, TX: OpenStax. https://openstax.org/books/principles-finance/pages/1-why-it-matters.
OpenStax entries are free to read online. Follow the licence shown on each linked source before redistributing or adapting its content.
Reuse the page responsiblyCite this pageAPA, MLA, Chicago, Harvard, BibTeX and RIS
These formats cite this calculator page itself. They are separate from the academic references above, which support the mathematical method and terminology.
APA 7
MW SysArc. (2026, July 21). Dividend Growth Model Calculator. MW SysArc Tools. https://finance.mwsysarc.com/dividend-growth-model-calculator
MLA 9
MW SysArc. “Dividend Growth Model Calculator.” MW SysArc Tools, 21 July 2026, https://finance.mwsysarc.com/dividend-growth-model-calculator. Accessed 31 Aug. 2026.
Chicago 17
MW SysArc. “Dividend Growth Model Calculator.” MW SysArc Tools. Published July 21, 2026. Accessed August 31, 2026. https://finance.mwsysarc.com/dividend-growth-model-calculator.
Harvard
MW SysArc (2026) ‘Dividend Growth Model Calculator’, MW SysArc Tools. Published 21 July 2026. Available at: https://finance.mwsysarc.com/dividend-growth-model-calculator (Accessed: 31 August 2026).
BibTeX and RIS records
BibTeX
@misc{mwsysarc_dividend_growth_model_personal_2026,
author = {{MW SysArc}},
title = {Dividend Growth Model Calculator},
howpublished = {MW SysArc Tools},
year = {2026},
url = {https://finance.mwsysarc.com/dividend-growth-model-calculator},
note = {Published July 21, 2026; accessed August 31, 2026}
}RIS
TY - ELEC
AU - MW SysArc
TI - Dividend Growth Model Calculator
T2 - MW SysArc Tools
PY - 2026
DA - 2026-07-21
Y2 - 2026-08-31
UR - https://finance.mwsysarc.com/dividend-growth-model-calculator
N1 - Published July 21, 2026
ER -Clear answers
Frequently asked questions
What does the Dividend growth model do?
Estimate an illustrative share value from next year's dividend, required return and perpetual growth.
How does the Dividend growth model work?
The calculator applies Estimated value = next dividend ÷ (required return − dividend growth). The Gordon model is highly sensitive to its assumptions and is meaningful only when required return exceeds sustainable growth.
What can I learn from the Dividend growth model?
You will connect Expected dividend next year, Required annual return, Perpetual dividend growth, Current share price to Illustrative intrinsic value, then test how changing one assumption affects the financial decision.
Does MW SysArc receive or store what I enter?
No. The calculation runs locally in your browser. MW SysArc does not receive or store your calculation inputs.
How should I use the result?
Use the result as a planning reference, and review how income, expenses, irregular payments, rates and time periods were classified before making decisions.
Last reviewed . Calculations tested .