Finance Gordon Growth Model
The Gordon Growth Model (GGM), also known as the Gordon-Shapiro Model, is a simple yet widely used method for valuing a company’s stock based on a future series of dividends that grow at a constant rate. It’s a discounted cash flow (DCF) model that assumes a company exists perpetually and continues to pay dividends. The core idea is that the intrinsic value of a stock is the present value of its expected future dividends.