How to Use the Dividend Discount Model Calculator:

• Select the Model Type:

  • Single Stage: If you expect the company's dividend growth rate to be stable over time.

  • Two Stage: If you expect the company to have a period of higher growth followed by a stable growth phase.

• Enter the Dividend or FCF per Share:

  • Input the current annual dividend per share or Free Cash Flow (FCF) per share.

  • Ensure the value is a number. Do not include currency symbols or commas.

  • Note: The dividend discount model and the discounted cash flow model use the same formula. The only difference is that the DDM uses dividends, whereas the DCF uses free cash flow.

• For Single Stage Model:

  • Enter the Terminal Growth Rate in its respective field.

  • This is the rate at which dividends are expected to grow indefinitely.

• For Two Stage Model:

  • Enter the High Growth Rate for the initial high growth phase.

  • Enter the Terminal Growth Rate for the stable growth phase that follows.

• Enter the Discount Rate:

  • Input your required rate of return as a percentage in the 'Discount Rate' field.

  • This rate is used to discount the future dividend payments to the present value.

• Calculate:

  • Click the 'Calculate' button to compute the fair value of the stock.

  • The result will be displayed under the button as 'Fair Value: $X.XX per share', where X.XX is the calculated value.

• To Recalculate:

  • Adjust any of the input values as needed.

  • Click 'Calculate' again to see the updated result.

• Tips:

• Ensure all percentage values are entered as numbers (e.g., for 5%, just enter 5).

• Use realistic and research-based figures for more accurate valuation.

• For the Two-stage model, remember the high growth period is set for 5 years.

• Double-check your inputs for accuracy before calculating.