Classic investor frameworks · Implied expectations
Reverse Gordon implied dividend growth
Infer perpetual dividend growth from the current share price, dividend and cost of equity under a single-stage model.
- Guide level
- Practical
- Output
- Implied expectations
Core formula
g = (price × cost of equity − current dividend) / (price + current dividend)How to interpret it
Infer perpetual dividend growth from the current share price, dividend and cost of equity under a single-stage model.
The output should be read as a scenario or decision aid, not as a guaranteed price target. Compare it with at least one method based on different economic assumptions.
Practical workflow
- Normalize the latest public financial and operating data.
- Choose assumptions that match the company's economics and accounting structure.
- Calculate conservative, base and optimistic cases where the method permits.
- Compare the result with market pricing and an independent valuation method.
- Document the assumptions that drive the largest changes in value.
Key limitation
A single-stage assumption; sensitive to the cost of equity and does not account for repurchases.
How Stockinsky uses it
Stockinsky uses this framework only when the company type and available data support it. Professional valuations expose assumptions, sources and warnings instead of presenting false precision.