How it works
Next-period dividend is divided by the gap between required return and constant dividend growth. This form solves for required period return; enter the known quantities in Constant period growth, Next-period dividend (same currency), Model value (same currency).
Inputs and units
| Input | Example value | What to enter |
|---|---|---|
| Constant period growth | 3 % | Formula symbol: growth. Enter the percentage as a number: for 15%, enter 15. Allowed range: -99–99.999. |
| Next-period dividend (same currency) | 2 | Formula symbol: dividend. Enter a numeric value. Must be greater than zero. |
| Model value (same currency) | 50 | Formula symbol: price. Enter a numeric value. Must be greater than zero. |
Worked example
Show example inputs and results
This example is generated by the same calculation engine using the starting values in the form. Your own inputs produce your own result.
- Constant period growth
- 3 %
- Next-period dividend (same currency)
- 2
- Model value (same currency)
- 50
Complete example results
- Required period return
- 7 %
Reading the result
The result solves for required period return from the entered quantities. Check the result unit and the formula conditions before using it.
Questions and answers
Can I use the example values for my own calculation?
The example values illustrate the calculation. Replace every input with your own information, especially dates, rates and the selected operation.
When can I use the required period return result?
Required return must exceed growth. Growth is assumed constant indefinitely; the result is not a price recommendation, dividend guarantee or after-tax value. All monetary inputs must use the same currency; currency conversion, tax and automatic fees are excluded.
Why are some results rounded?
Results display up to 8 decimal places. Calculations use the unrounded values; very small values use scientific notation. JavaScript floating-point arithmetic can introduce tiny rounding differences.
Are my inputs sent to a server?
The calculator processes inputs in your browser. Its code does not send your values to a server.
Method sources: openstax.org