Finance Lab
A formula is not a fact. It is a decision.
Each experiment walks the same six stages: read the formula, understand what it claims, manipulate the variables, observe the sensitivity, solve for a target, then apply it to a decision.
Investments
Dividend discount model
V₀ = D₁ ÷ (r − g)
The Gordon growth model values a share as the present value of a dividend stream growing at a constant rate forever.
What each symbol means
- Current dividend (D₀)
- Dividend just paid per share.
- Growth rate (g)
- Expected perpetual growth.
- Required return (r)
- Return investors demand for the risk.