The Gordon Growth Model (GGM) is a variation of the standard discount model.

The
key difference is that the GGM model assumes the dividends will grow at a constant
rate till perpetuity.

With this assumption, the value of the stock can be calculated using the following
simplified formula:

V0 = D1/(ke – gc)

Model Assumptions

 It assumes that the dividends are a suitable measure for valuation.

 It assumes that both the required return on equity and dividend growth rate will
be constant forever.
 The required return on common equity must be greater than the expected growth
rate of the dividend.

The GGM is suitable in the following cases:

 The analyst is looking at broad equity indexes.

 The analyst is valuing steadily growing companies that pay dividends.

Drawbacks

 Highly sensitive to small changes in required return on equity and dividend

growth rate.
 The model cannot be used to value companies that do not pay dividends.
 The model cannot be used to value companies that don’t have a stable growth
rate.

Source: https://financetrain.com/gordon-constant-growth-dividend-discount-model/