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\subsection{The \textit{DDM}}  Applying equation 1 to equities leads to  \begin{equation}  $P_{t}=\displaystyle\sum_{i=1}^{K}\frac{D_{t+i}}{(1+R)^i}+P_{t+K}$  \end{equation}  where $P_{t}$ is the stocks price at $t$, $D_{t+i}$ the future dividend at $t+i$, $R$ the discount rate and  $P_{t+K}$ the terminal value. Again, $R$ is necessarely the total return of the shareholder one period if he pays $P_{t}$, receive $D_{t+1}$,$D_{t+2}$, . . . $D_{t+K}$ and sells the stock at $P_{t+K}$. It is worth mentioning that the dividends are always reinvested and that the total shareholder return is going to be $(1+R)^K-1$ over $K$ periods.  The Gordon Growth Model is a simple version of the DDM where it is assumed that