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The Discounted Dividend Model (DDM) is a fundamental method used in Security Analysis and Portfolio Management to value a stock based on the present value of its expected future dividends. This model assumes that a stock's intrinsic value is the sum of the present values of all expected future dividends, discounted at the required rate of return. It is particularly useful for valuing dividend-paying stocks and helps investors determine whether a stock is overvalued or undervalued.

### Formula for the Discounted Dividend Model
The basic form of the DDM is:

\[
P_0 = \sum_{t=1}^{\infty} \frac{D_t}{(1 + r)^t}
\]

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