What is Gordon Growth Model?
Values a growing perpetuity and yields the decomposition R = Y − g: the cap rate equals the required return minus expected long-term income growth. Explains why a low cap rate can price strong growth rather than overpricing.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.