Stock Expected Return

This calculator estimates the expected return of a common stock using the Dividend Discount Model (DDM) and shows how different assumptions affect results.

Inputs: Stock Price (P₀), Next Dividend (D₁), and Expected Growth Rate (g).
The formula used is Expected Return = (D₁ / P₀) + g. For example, if P₀ = 100, D₁ = 1, and g = 0.05, the expected return is 6%.
A simulation area shows combinations of dividend-to-price ratios and growth rates to visualize how returns change under different conditions.
Higher dividends or growth rates increase the expected return; lower ones decrease it. Use this tool to compare whether a stock’s expected return justifies its price and risk assumptions.