how to use the dividend growth model
Your required rate of return is based on personal requirements for return on your investment capital. How To Calculate Value Based On The Dividend Growth Model: 1  Add 1 to the dividend growth rate. 2  For example, if the rate is 12%, add 1 to 0.12.3  Multiply the sum with the current dividend payout. Add 1 to the dividend growth rate. 2  For example, if the rate is 12%, add 1 to 0.12. 3  Multiply the sum with the current dividend payout. 4  For example, if the payout is $1.50, multiply that by 1.12 to get 1.68.