Dividend Calculator

The dividend formulas

Two simple relationships drive everything here. The dividend yield tells you the cash return as a percentage of the price, and the annual income scales that to your holding:

yield(%) = annual dividend per share ÷ share price × 100 annual income = dividend per share × number of shares

With a dividend growth rate g, the income in year t grows geometrically: income_t = income₁ × (1 + g)^t−1. Summing that series gives the cumulative dividends collected over the whole horizon: income₁ × ((1 + g)^years − 1) ÷ g (and simply income₁ × years when g = 0).

Worked example

A stock at $50 paying $2.50 per share a year, holding 100 shares with 0% growth over 10 years:

Yield: $2.50 ÷ $50 × 100 = 5.00%.

Year-1 income: $2.50 × 100 = $250.00.

Year-10 income: with 0% growth it stays $250.00.

Cumulative over 10 years: $250 × 10 = $2,500.00.

With 5% growth instead: year-10 income rises to about $387.83 and the 10-year total to about $3,144.47.

Yield on cost over time

Your yield on cost is the current dividend divided by the price you originally paid — not today's price. A growing dividend lifts it every year, which is why long-term dividend-growth investors can end up with double-digit yields on cost even when the market yield looks ordinary.

Year	Income at 0% growth	Income at 5% growth
1	$250.00	$250.00
3	$250.00	$275.63
5	$250.00	$303.88
10	$250.00	$387.83

Note: dividends are paid at the board's discretion and can be reduced or cut. This tool assumes the dividend and any growth rate you enter continue unchanged, so treat the projection as an estimate.

Frequently asked questions

How is dividend yield calculated?

Dividend yield = annual dividend per share ÷ share price × 100. A stock paying $2.50 a year that trades at $50 has a yield of 5%. Yield moves inversely to price: if the price falls and the dividend holds, the yield rises.

What is the difference between dividend yield and yield on cost?

Yield is the dividend divided by the current price. Yield on cost divides the current dividend by the price you originally paid. If the company keeps raising its dividend, your yield on cost climbs over time even though the market yield may stay flat.

How does dividend growth affect future income?

With an annual growth rate g, the income in year t is the year-1 income times (1 + g)^t−1. A small growth rate compounds: at 5% growth, a $250 first-year income becomes about $388 by year 10.

Are dividends guaranteed?

No. Dividends are declared at the board's discretion and can be cut or suspended, especially in a downturn. This calculator assumes the dividend (and any growth rate you enter) continues, which is an estimate, not a promise.

The dividend formulas

Worked example

Yield on cost over time

Frequently asked questions

Related calculators