The Gordon Growth Model: Why One Variable Drives Stock Prices

Описание: A single variable in a simple formula explains why stock prices swing so dramatically on news about the future. This video breaks down the Gordon Growth Model, showing how the growth rate in the denominator creates explosive price sensitivity—and why understanding this relationship is essential for valuing any dividend-paying stock.

Key concepts covered:
• The perpetuity formula as the foundation for stock valuation
• How the Gordon Growth Model adds growth: P = D/(r-g)
• Why price sensitivity explodes as growth approaches required return
• The cold fusion bubble explained through one formula
• Required return decomposition: dividend yield plus growth
• Why analysts systematically undervalued stocks for decades
• Reverse-engineering market expectations from current prices
• Dividend policy as a signal about future growth
• The constraint that sustainable growth must be less than the discount rate

ORIGINAL SOURCE
This video distills concepts from educational content on stock valuation.
Source:    • Ses 8: Equities  

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