Given here, Gordon growth model formula to calculate the constant growth rate. To find, just multiply the current price by the rate of return. Subtract the resultant value from current annual dividends. On the other end, add the current price with the current annual dividends. Divide the obtained values to know the result. Constant growth rate formula is based on current price and current annual dividends. It determines the current price of a share relative to its dividend payments.
Use the Gordon growth model to find the constant growth rate. The model solves for the present value of the infinite series of future dividends. Constant growth rate formula is based on current price and current annual dividends.