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How to Calculate Dividend Payment During a Year

Original post by Mark Kennan of Demand Media

Stocks pay dividends to pass earnings on to shareholders.

Companies cannot pay investors a salary like they pay their employees. Instead, to allow shareholders to partake in the company's earnings, the company pays earnings out to the company in dividends. Some companies pay annual dividends, while other companies prefer to pay quarterly dividends. You might need to calculate your dividends paid per year for budgeting your income, comparing various investments or reporting gains on your income taxes. To figure the dividends for the year, you need to know the dividend payment amounts during the year and the number of shares on which those dividends were paid.

Step 1

Look up the dividend payments the company made during the year. For example, a company might pay a dividend of $2.30 for the first quarter, $2.36 for the second quarter, $2.22 for the third quarter and $2.24 for the fourth quarter.

Step 2

Add the value of each dividend payment to find the total dividend payment made during the year per share. Using the example in the previous step, add the four quarterly payments to get the total dividend payment for the year, which in this case is $9.12 per share.

Step 3

Multiply the total dividend payments per year per share by the number of shares you own to find the dividends paid to you. For this example, if you own 620 shares, multiply 620 by $9.12 to find you received $5,654.40 in dividends.

Step 4

Multiply the total dividend payments per year per share by the number of shares outstanding to find the dividends paid by the company. Continuing with the example, if the company has 150,000 shares outstanding, multiply $9.12 by 150,000 to find a total of $1,368,000 in dividends paid out for the year.

                   

References

About the Author

Mark Kennan is a freelance writer specializing in finance-related articles. He has worked as a sports editor for "Ring-Tum Phi" and published articles on a number of online outlets. Kennan holds a Bachelor of Arts in history and politics from Washington and Lee University.

Photo Credits

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