What Is the Formula for Calculating Dividends?
The formula for calculating dividends per share is stated as DPS = dividends/number of shares. In this instance, DPS stands for dividends per share, while the "dividends" in the formula refers to annual dividends that are paid, and the "number of shares" refers to the number of shares that are outstanding.
This particular dividends formula is often used by investors who have a preference for investing with companies whose stock pays dividends. The DPS, or dividends per share, is also used in other stock calculations, including the dividend payout ratio and the dividend yield formula. In any stock calculation, perspective is a variable that can alter the outcome of any quotient.