## Three Stage Dividend Discount Model

This model is designed to value the equity in a firm with three stages of growth - an initial period of high growth, a transition period of declining growth and a final period of stable growth.

## $$\frac{d}{k-{g}_{2}}+[1+{g}_{2}+\frac{{n}_{1}+{n}_{2}}{2}][{g}_{1}-{g}_{2}]$$

here,n1= Length of high growth phase.n2= Periods until constant growth phase. n2= n1+ length of transition phase.g1= Growth rate during high growth phase. g2= Growth in constant growth phase after n.d=dividend for the next year.

ENTER THE VARIABLES TO BE USED IN THE FORMULA