[Gordon Growth Model]: Relationship between k and g
Here it is! For all those times when you were just itching to know about k and g’s relationship, I have taken the time to provide the formulas and a simple mathematical sample.
* I used excel and Microsoft Equation Editor to do this.
* Starting with some givens, I held either k or g constant and varied the other. By increasing and decreasing the variable values you can see what happens to the difference and hence the value of the stock.