Constant growth model

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Constant growth model
	• Also called the Gordon-Shapiro model, an application of the dividend discount model which assumes (1) a fixed growth rate for future dividends and (2) a single discount rate.
	• A widely cited dividend valuation approach that assumes that dividends will grow at a constant rate that is less than the required return.

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	Embedded terms in definition
	Discount rate Discount Dividend discount model Dividends Dividend Future Growth rate Required return Return Valuation Will

	Related Terms
	Asset pricing model Baumol model Binomial option pricing model Black option model Black scholes option model Black scholes option pricing model Business model eps projection Capital asset pricing model Compound annual growth rate Constant growth dividend valuation gordon model Constant maturity Constant maturity treasuries Constant payout ratio dividend policy Discounted dividend model Dividend discount model Dividend growth model Dividend valuation model Factor model Garmen kohlhagen option pricing model Gordon model Growth fund Growth fund or growth stocks Growth manager Growth opportunity Growth phase Growth rate Growth stock Ho lee option model Implied growth Index model Internal growth rate Market model Miller orr model Net present value of growth opportunities Option adjusted spread model Pe ratio to eps growth Pie model of capital structure Present value of growth opportunities Simple compound growth method Simple linear trend model Single factor model Single index model Sustainable growth rate Two factor model Two state option pricing model Value at risk model Variable growth model Zero growth model

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