Investors buy stocks to participate in the growth of a company. Many stocks reward investors with dividend payments, but how do you know whether you’re paying more for a stock than what it is worth?

Arguably the most important questions an investor must ask is: “How much is the stock actually worth?” There are many methods to answer this question. One popular method is the Gordon Growth Model.

Hedge funds and financial analysts typically use a variety of approaches to determine the intrinsic value of shares. With that being said, the Gordon Growth Model is a subcategory of a larger group of ...