Gordan Growth Model (With Excel): Implications For Total Return, Dividend Yield and Capital Gains

In this video, I explain the Gordon Growth Model of stock valuation. I show how the model is just a special case of the broader dividend growth model. I also show what the model implies about the relationship between total return on a stock and its dividend yield and capital gains component. Specifically, you will learn why capital gains equals the growth rate of dividends in the Gordan Growth model.

[@OdambsTech2020]

Great job

[@gokuvegeta9500]

Your illustrative examples are great.
I loved your playlist on bonds

[@rashsbadawy6337]

you are the best :)

[@user-ti1gx2hy5m]

give me a real life stock that does this, great for a sales marketing scam

[@professorikram]

Hi Leo. Most mature companies (eg McDonalds, IBM, Caterpillar) which have stable cash flows offer dividends that grow at a constant rate, ie their dividend yield is constant. Such companies CAN, therefore, be valued fairly accurately using the Gordan Growth Model. That said, it is hard (if not impossible) to use this model to value companies that pay no dividends because they are in a growth phase and are retaining all of the net income to pursue growth opportunities instead.
My point is that this model is not a “marketing scam”. It applies pretty well to companies that pay consistent dividends due to stable cash flows.

[@sarbarthadas9347]

you are the best