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Dividend discount model (two-stage)Analyst
Fast dividend growth for a few years, then a stable long-term rate.
What you’ll enter
- Annual dividend per share
- Growth in first stage
- Years of first stage
- Long-term growth
- Required return
- Current share price (optional)
Included with Analyst
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The formula
Value = Σ Dₜ ÷ (1 + r)ᵗ + [Dₙ × (1 + g₂) ÷ (r − g₂)] ÷ (1 + r)ⁿ
Each first-stage dividend is discounted separately. Everything after is valued with the constant-growth formula and discounted back to today.
Use the sensitivity table: small changes in the required return or long-term growth move the value a lot.