PV of High-Growth Dividends
$6.11
Stock Non-constant Growth Calculator
Two-stage Dividend Discount Model for stocks with a high-growth phase.
Intrinsic Value per Share
$41.40
PV of Terminal Value
$35.29
Terminal Value
$45.70
How to use the Stock Non-constant Growth Calculator
The Stock Non-constant Growth Calculator is free and runs entirely in your browser — no sign-up, and nothing you enter leaves your device. It opens pre-filled with a realistic example, so you can see how it works before replacing any figure with your own; the results update as you type. Press Calculate to refresh the result panel, or Reset to return to the example.
The inputs it asks for:
- Current Dividend (D0) — a dollar amount.
- High-Growth Rate — a percentage (enter 6 for 6%).
- Years of High Growth — a number.
- Stable (Terminal) Growth Rate — a percentage (enter 6 for 6%).
- Required Rate of Return — a percentage (enter 6 for 6%).
The formula
A two-stage dividend discount model. It discounts each dividend through an explicit high-growth phase, then values everything after as a Gordon-growth "terminal value" and discounts that lump back too:
Value = Σ Dₜ/(1 + r)ᵗ (high-growth years) + Terminal ÷ (1 + r)ⁿ
Terminal = D₍ₙ₊₁₎ / (r − g_stable)- Dₜ
- the dividend in year t of the high-growth phase
- r, g_stable
- the required return and the perpetual growth rate after the high-growth years
- n
- the number of high-growth years
This suits companies expected to grow fast for a while, then settle to a steady mature rate — a better fit than single-stage growth for young firms. As with any dividend model it needs r > stable g, and the terminal value (often most of the total) is very sensitive to that stable-growth assumption.
Worked example
Using the example values — Current Dividend (D0) $2.00, High-Growth Rate 10%, Years of High Growth 3, Stable (Terminal) Growth Rate 3%, Required Rate of Return 9% — the Stock Non-constant Growth Calculator returns a Intrinsic Value per Share of $41.40. It also reports PV of High-Growth Dividends ($6.11), PV of Terminal Value ($35.29), Terminal Value ($45.70).
Prefer your own numbers? Change any field above and this recomputes instantly.
Key terms
- Two-stage DDM
- A dividend model with an explicit high-growth phase followed by stable perpetual growth.
- Terminal value
- The value, at the end of the high-growth phase, of all dividends thereafter.
- Required return (r)
- The annual return you demand to hold the stock.
- Present value
- Future dividends and the terminal value discounted to today.
Frequently asked questions
When is a two-stage model better than constant growth?
When a company is growing quickly now but will plausibly slow to a mature rate later — most young or fast-growing firms. Constant growth can't capture that transition.
Why does the terminal value dominate?
It captures every dividend beyond the explicit years, so it's often the majority of the total — which also makes the result very sensitive to the stable-growth and required-return assumptions.
What if the company pays no dividend?
Dividend models fit poorly. For non-payers, analysts often use discounted free cash flow or valuation multiples instead.