Gordon Growth Model
Valuation formula holding that the total return of a stock investment will equal its dividend yield plus its dividend growth rate:
R = D/P + G
where
D is next year's annual dividend;
P is the current share price;
G is the growth rate.
For the origin of the equation, see the "constant growth case" formula near the bottom of this stock valuation page  but think "dividends" where the page says "earnings".
(Or if you're more of a peopleperson, you can read about the career of
Myron J. Gordon.)
