# Dividend rate

**Dividend rate** is how much money the dividend is over the coming year.

## Expanded Definition

Simply put, it is the amount of money paid out in the most recent period, multiplied by the number of payments per year, and adding any special dividends expected. This is per share owned.

<math>Dividend\ rate = (Amt\ paid\ last\ time) * (No.\ of\ payments\ per\ year) + (special\ dividend,\ if\ any)</math>

For instance, if a company paid $0.56 last quarter and it pays 4 times a year (typical for American firms) and it usually pays a $0.15 special dividend at the end of the year, then the dividend rate would be:

<math>$0.56 * 4 + $0.15 = $2.24 + $0.15 = $2.39\ per\ share</math>

To calculate what the dividend yield is, then, all you do is take the dividend rate and divide by the current stock price. If that company's stock price is $49.57, then the yield would be:

<math>\frac{\frac{$2.39}{share}}{\frac{$49.57}{share}} = \frac{$2.39}{share} * \frac{share}{$49.57} = \frac{$2.39}{$49.57} = 0.0482 = 4.82%</math>

Note that while the dividend *yield* will vary as the price of the stock varies, the dividend *rate* remains constant, only changing when the board of directors increases or decreases the dividend.

The total amount of the dividend paid out by the company is just the rate times the number of common shares outstanding.

## Related Terms

## Recent Mentions on Fool.com

- Offshore Drilling: Another Big Dividend Bites the Dust
- Costco Wholesale Corp. Delights Investors With Special Dividend
- 5 Things Las Vegas Sands' Management Wants You to Know
- 3 Ways to Decide Whether a Dividend Is "Safe"
- These Stocks Pay Big Yields With Barely More Risk Than Bonds
- Prospect Capital Corp. Slashes Its Dividend: Some Thoughts