Common stock offers investors partial ownership in your business. Shareholders may receive voting rights on company policy, and they receive dividends if profits remain after paying dividends to preferred shareholders. The value of each common stock share equals the sum of all future dividends. Assuming that these dividends grow more slowly than the discount rate, you can calculate the value of common stock shares using the dividend growth model, which uses the difference between these two rates.

Add 1 to your dividends' predicted growth rate. For example, if your dividends will grow by 9 percent each year, add 1 to 0.09 to get 1.09.

Multiply this value by this year's dividends per share to determine next year's dividends. For example, if you issue $2.20 per share in dividends, multiply $2.20 by 1.09 to get $2.398.

Subtract your growth rate from the discount rate, which is the investors' required annual return. For example, if you assume a discount rate of 11 percent, subtract 0.09 from 0.11 to get 0.02.

Divide next year's dividends by the difference between these rates. With this example, divide $2.398 by 0.02 to get $119.9. This is the value of each share of common stock.

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