C1
DDM Lab
Value a company's dividends with growth models from the simplest to three stages, then see what the market price implies about growth.
Learning focus: A dividend model is only as good as its growth assumption, and it fits a company that pays out what it can afford, with a payout tied to earnings.
Case file
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Dividend model
Preferred stock
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Gordon growth value
$47.15
Latest dividend
$2.05
Required return
8.00%
Price
$44.50
value is 6.0% from price
PVGO
$10.73
24.1% of price
Implied growth
3.24%
Implied return
8.27%
Sustainable growth
3.64%
ROE 17.0%, retention 21.5%
Preferred share value
$76.92
The same dividend, six models
Every bar starts from the same dividend, required return and terminal growth. The gaps come only from the growth path you set.