Implied Price Per Share Calculator

How to Use This Calculator

1. Enter your current annual dividend per share (the dividend paid in the most recent year)
2. Enter the expected annual growth rate of dividends (based on historical growth or analyst estimates)
3. Enter your required rate of return (the minimum return you expect to earn from the investment)
4. Click the "Calculate" button to see the implied price per share

Understanding the Formula

This calculator uses the Gordon Growth Model formula:
P = D₀ × (1+g)/(r-g)

Where:
P = Implied Price Per Share
D₀ = Current Annual Dividend
g = Dividend Growth Rate
r = Required Rate of Return

Practical Applications

• Valuation comparison: Compare the calculated implied price with the current market price to determine if a stock appears overvalued or undervalued
• Investment decision: Use as one of several metrics when deciding whether to buy, hold, or sell a stock
• Dividend growth analysis: Assess the impact of changing dividend growth expectations on stock valuation

Important Considerations

The Dividend Discount Model has several assumptions and limitations:
• Assumes dividends will grow at a constant rate indefinitely
• May not be suitable for companies that don't pay dividends
• Sensitive to changes in input assumptions
• Doesn't account for non-dividend factors affecting stock price