How to Calculate a Dividend at a Certain Amount Per Share

by Mark Kennan, studioD

A dividend is a payment made by a company to its shareholders as a way to pass along earnings. If a company announces the dividend as a specific amount per share, you can calculate the amount you will receive, the total amount paid out for the dividend and the dividend payout ratio. The dividend payout ratio measures the portion of the company's earnings that it pays out in dividends, as opposed to keeping the earnings to reinvest in the company.

Multiply the dividends per share by the number of shares you own to find how much you will earn in dividends. For example, if you own 500 shares and the dividend is $1.22 per share, multiply 500 by $1.22 to find you will earn $610 in dividends.

Multiply the dividend per share by the number of outstanding shares to calculate the total dividends paid out by the company. In this example, if the company has 250,000 outstanding shares, multiply $1.22 by 250,000 to find that the total dividend payment is $305,000.

Divide the dividends per share by the earnings per share to find the dividend payout ratio. If the company has $2 in earnings per share, divide $1.22 by $2 to get a payout ratio of 0.61, or 61 percent.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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