# Graham & Dodd Model
The Graham & Dodd model holds that the stock market places considerably more weight on dividends than on retained earnings. It is a dividend-relevance traditional model.
## Formula
$$P = m\left(D + \frac{E}{3}\right)$$
| Symbol | Meaning |
|---|---|
| $P$ | Market price |
| $D$ | Dividend per share |
| $E$ | Earnings per share |
| $m$ | Multiplier |
## Interpretation
The model gives the dividend $D$ its full weight but counts earnings at only one-third ($E/3$), reflecting the traditional view that investors value a rupee of dividend roughly three times as highly as a rupee of retained earnings.