An actual rate of return is subtracted from expected growth rate then it is divided from dividend stockholders expects use for calculating

An actual rate of return is subtracted from expected growth rate then it is divided from dividend stockholders expects use for calculating constant growth model. The Gordon Growth Model is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate. It is a popular and straightforward variant of a dividend discount model (DDM).