Work out growing perpetuity value instantly with clear inputs, formula shown and shareable results.
A growing perpetuity pays for ever with each payment a fixed percentage above the last. Its value is next year's payment divided by the spread between the discount rate and the growth rate — the engine behind the Gordon dividend growth model.
Gordon growth
PV = D₁ / (r - g)
If g ≥ r the discounted payments no longer shrink, so the sum diverges and no finite value exists.
The value depends on a small difference of two large numbers, so shaving 1 point off the spread can lift the value by half.