# Dividend Calculator

Dividend yield equal to annual dividend divided to stock price multiple numbers of 100 value. The percentage value, we can use the dividend yield value to calculate dividend payouts in the same way that we would calculate interest rate.

**Formula us,**

dividend yield = annual dividend / stock price * 100%

**Let us consider,**

- )Stock price-Different returns on investment depending on the stock price.
- )Annual Dividend is – ratio of a company’s
**annual dividend**to the company’s**share price**.

**1.)Dividend reinvestment calculator**

The company, it automatically gets reinvested into more shares, The other name of our tool – the **DRIP calculator**. The dividends are **compounding** meaning they are added back to the **initial invested amount**.

**Formula us,**

FV = P * (1 + r / m)^mt,

**Let us consider,**

- FV – the future value of the investment, in our calculator it is the
**final balance** - P – the
**money invested**or**initial balance**(the value of the investment) - r – the
**dividend yield**(in decimals) - m – the number of times the dividend is compounded per year (
**compounding frequency**) - t – the
**numbers of years**the money is invested ford.

**2.) calculate dividend payout**

**let us consider,**

**share price**is the price of a single share in a company,**annual dividend per share**is the amount of money paid out yearly per share,**dividend yield**is the ratio of annual dividend to share price,**money invested**is the total amount of money invested in shares of the company,**number of years**is the duration of the investment,**compound frequency**means how often the dividends are added to the money invested,**final balance**is the total sum of money at the end of the investment,

**profit from dividends** is the amount of money gained from company payments.

**Example**

share price is $50 and, , the annual dividend is $3.50.

This would make the dividend yield:

dividend yield = annual dividend / stock price * 100%

dividend yield = $2.50 / $40

The answer is Dividend yield = 0.06

**Dividend Example,**

Invest a $500 in a dividend-paying stock for two years. The dividend is compounded yearly,

Finally entering all the variables into the dividend reinvestment formula:

FV = P * (1 + r / m)^mt,

final balance = $500 * (1 + 0.06/1)^(1*2)

The answer is final balance = $799.94