Stock duration

Stock duration of an equity stock is the percentage change in price in response to a 1% change in the long-term return that the stock is priced to deliver.^{[citation needed]}

Duration

As per Dividend Discount Model: Formula for the duration of stock is as follows-

$D_{ddm} = \frac{1}{K_e-g}$

where

• D_ddm is the duration of stock under the DDM model
• K_e is the discount rate
• g is the expected growth rate in perpetuity^{[citation needed]}

Modified duration

For the stock market as a whole, the modified duration is simply the price/dividend ratio, which for the S&P 500 was about 62 in February 2004.^{[citation needed]}

See also

• Bond duration

External links

• Hussman Funds - Weekly Market Comment: February 23, 2004 - Buy-and-Hold For the Duration?