# 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,

1. )Stock  price-Different returns on investment depending on the stock price.
2. )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
The Dividend Calculation is price of a single share in a company.The amount of money paid out yearly per share.The ratio of of annual dividend to share price. The amount of money invested in shares of the company.

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