Dividend Calculator
A dividend calculator helps investors work out the income they can expect from dividend-paying shares, accounting for dividend yield, reinvestment (DRIP), tax rates, and compounding over time.
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Tip: Dividend reinvestment plans (DRIPs) allow you to buy fractional shares automatically. Over 20 years, reinvesting a 4% dividend nearly doubles your total return compared to taking cash.
- 1Find the annual dividend per share (or dividend yield × share price)
- 2Multiply by the number of shares held to get annual dividend income
- 3If reinvesting, compound each payment back into more shares at the current price
- 4Apply tax: dividends may be taxed at a preferential rate (qualified dividends) or as ordinary income
500 shares · $2.40 annual dividend=$1,200/year$100/month passive income
1,000 shares · 4% yield · $50 share price=$2,000/year$2 dividend per share × 1000
| Year | Without DRIP | With DRIP (compounded) |
|---|---|---|
| 1 | $10,400 | $10,400 |
| 5 | $12,000 | $12,167 |
| 10 | $14,000 | $14,802 |
| 20 | $18,000 | $21,911 |
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Fun Fact
Benjamin Graham, mentor to Warren Buffett, argued that dividends are the only true measure of a stock's intrinsic value — because only cash in hand is real.
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