Abbreviation for Dividend Discount Model. A method of valuing a stock price by discounting estimated future dividends back to current value. This model assumes that dividends paid in the future are worth less than their nominal value because of the effects of inflation. To compare them with dividends received today they must be discounted by the estimated rate of inflation. DDM is the share valuation model most readily comparable with bond evaluation, which discounts future coupon payments by an appropriate rate.