Finance calculators

Dividend calculator

Dividend yield, annual income after tax and long-term growth with dividend reinvestment (DRIP).

Inputs

Share priceAnnual dividend per shareAmount investedYearsyearsDividend growth%/yrShare price growth%/yrPaidTax on dividends%Reinvest dividends (DRIP)

Results

Methodology

Conventions

Dividends are paid in m equal instalments a year, after tax; the share price grows smoothly between payments.
Reinvested dividends buy shares at the price on the payment date. Dividends not reinvested are held as cash without interest.
The dividend per share rises by the dividend growth rate once a year.

References

Bodie, Kane and Marcus, Investments, ch. 18

Formulas

Dividend yield: y = D / P
Each payment: \text{Div} = N \cdot \frac{D_k}{m} (1 - \tau),\quad D_k = D (1 + g_d)^{k-1}
Reinvestment: N \leftarrow N + \text{Div} / P_t,\quad P_t = P (1 + g_p)^{t}
Annualised return: (V_T / V_0)^{1/T} - 1