This equation,dividends next year/required rate of return minus growth rate tells us the stock's

Question

Quizplus · Accepted Answer

The equation, also known as the Gordon Growth Model, calculates the intrinsic value of a stock by dividing the expected dividend in the next year by the difference between the investor's required rate of return and the expected growth rate of the company. Therefore, the result of the equation gives the stock's value.

This Equation,dividends Next Year/required Rate of Return Minus Growth Rate