![]() ![]() ![]() ![]() In our example, inputs are the expected rate of return (ke). In the first column, you have the input assumptions. P = D1/r-g (P = stock price, g = constant growth rate, r = rate of return, D1 = value of next year's dividend)īelow are the steps that you can follow to implement a one-dimensional sensitivity analysis in excel. ![]() Gordon Growth formula Gordon Growth Formula Gordon Growth Model derives a company's intrinsic value if an investor keeps on receiving dividends with constant growth forever. read more) below to understand this in detail.Ĭonstant growth DDM gives us the Fair value of a stock as a present value of an infinite stream of dividends growing at a constant rate. In other words, it is used to value stocks based on the future dividends' net present value. Let us take the Finance example ( Dividend discount model Dividend Discount Model The Dividend Discount Model (DDM) is a method of calculating the stock price based on the likely dividends that will be paid and discounting them at the expected yearly rate. #1 – One-Variable Data Table Sensitivity Analysis in Excel #3 – Goal Seek for Sensitivity Analysis in Excel.#2 – Two-Variable Data Table Sensitivity Analysis in Excel.#1 – One-Variable Data Table Sensitivity Analysis in Excel. ![]()
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