Unpacking GGM: What Is the Full Form and Where Is It Used?

Depending on the context you encounter it in, GGM can stand for a few different things. However, its most prominent and widely recognized full form is the Gordon Growth Model, a cornerstone concept in finance and stock valuation.

To help you navigate all the possibilities, this article explores the primary financial definition of GGM, along with a few other common contexts where the acronym pops up.

1. The Financial Definition: Gordon Growth Model

If you are reading about stock markets, corporate finance, or equity research, GGM stands for the Gordon Growth Model (sometimes referred to as the Dividend Discount Model).

Developed by Myron J. Gordon and Eli Shapiro in 1956, it is a simple yet powerful mathematical formula used to determine the intrinsic value of a company’s stock based on a series of future dividends that grow at a constant rate.

How the Model Works

The Gordon Growth Model rests on the premise that a business will continue to pay dividends, and those dividends will increase at a steady, unchanging percentage year after year.