## Dividend Gordon growth model:

A dividend Gordon growth model is a stock valuation model that calculates the intrinsic value of the stock based on the growth rate of its future dividend payments. In this model, it excludes the other external and internal factors that may influence the market value of the stock, such as change of management or economic downturn.

Formula of dividend growth model:

{eq}Stock~value=\displaystyle \frac{D}{k-g}\\ whereas:\\ D=dividend\\ k=required~return\\ g=growth~rate\\ {/eq}

{eq}\begin{align*} Stock~value&=\frac{1.83}{.063-.060}\\ &=\frac{1.83}{.003}\\ &=610.00 \end{align*} {/eq}

The current market value of the stock is \$610.00