The growth rate of an investment shows how much its value increases over time, helping to evaluate performance. A common way to calculate this is by using the compound annual growth rate (CAGR ...

Plugging that number into our formula, we can quickly calculate that this growth represents a 20% projected growth rate.

Discover how the Gordon Growth Model calculates stock value using constant dividend growth, including key inputs and examples ...

The growth rate is not deducted as in the cap rate formula because the discount rate is applied to a series of cash flows and not a one-year net operating income.