Examples of Dividend Ratio and Dividend Yield
Example 1: Given the dividends paid by an organization is 50000 and the net income is 100000 then, find the dividend payout ratio.
Solution:
Dividend payout ratio is given by:
Dividend Payout Ratio = Dividends Paid / Net Income
Dividend Payout Ratio = 50000 /100000
Dividend Payout Ratio = 0.5
Example 2: If the annual dividend per share is 100000 and the current share price is 20000 then, find the dividend yield ratio.
Solution:
Dividend yield is given by the formula:
Dividend Yield = Annual Dividend Per Share / Current Share Price
Dividend Yield = 100000 / 20000
Dividend Yield = 5
How to Calculate Dividend
Dividend per share is calculated using a simple method. To calculate DPS, divide the total number of dividends paid by the company by the total number of shares held. The annual dividend is the total dividends given out during the year.
In this article, we will discuss how to calculate dividends along with the basic information of the dividend. We will also discuss the dividend formula and provide some examples of how to calculate dividends. Let’s start our learning on “How to Calculate Dividend.”
Table of Content
- What is Dividend Ratio?
- What is Dividend Yield?
- Formula and Calculation of Dividend Payout Ratio
- Formula and Calculation of Dividend Yield
- What is Difference Between the Dividend Payout Ratio and Dividend Yield?