Dividend Calculator
This Dividend Growth Calculator helps you model future dividend income and share growth under common scenarios: reinvesting dividends (DRIP), holding dividends as cash, and estimating required capital to achieve a target dividend income.
Results are model outputs based on the inputs and assumptions you provide. They are educational and illustrative, not investment advice.
Estimates outcomes when dividends are reinvested into additional shares each year and dividends grow at a fixed annual rate. Assumes dividends are reinvested at the prevailing share price and that share price movement is not modeled separately unless assumed equal to dividend growth (see methodology).
Inputs
Results
Estimated shares (end)
1,100
Dividend per share (end)
$8.00
Annual dividend income (end)
$8,800.00
| Output | Value | Unit |
|---|---|---|
| Estimated shares (end) | 1,100 | shares |
| Dividend per share (end) | $8.00 | USD |
| Annual dividend income (end) | $8,800.00 | USD |
Visualization
Methodology
The calculator uses deterministic, fixed-rate models: an annual dividend growth rate is applied to dividend per share, and reinvested dividends are treated as incremental share purchases at the prevailing share price for each projection period.
Key simplifying assumptions are documented so you can judge applicability: share price movement is not modeled explicitly except where an assumption aligns price growth with dividend growth. Transaction costs, taxes, fractional share restrictions, and timing within a year are not included by default unless you adjust inputs.
Security and data handling guidance for the tool references established standards for integrity and transparency. For implementation, follow NIST guidelines for data protection and ISO/IEEE best practices for software quality and documentation. This tool is not audited financial advice; use institutional policies and professional guidance for compliance-critical decisions.
Worked examples
Example 1 (default inputs): 100 shares, $50 price, $2 dividend per share, 5% annual dividend growth, 10 years. With reinvestment this tool estimates both increased share count and higher dividend per share producing a compounded income increase.
Example 2 (target income): To reach $2,000 annual dividend income in 10 years with $2 current dividend and 5% growth, the calculator estimates how many shares are needed and the initial capital required at the current share price.
Further resources
Expert Q&A
How accurate are these projections?
Projections are deterministic models that depend entirely on your inputs and simplifying assumptions explained in the methodology. They do not include market risk, variable dividend cuts/increases, reinvestment timing effects, taxes, or transaction fees. Use them for planning and scenario comparison, not as guaranteed outcomes.
Does the calculator account for taxes and fees?
No. Taxes, brokerage fees, and other transaction costs are excluded. To include them, adjust inputs or apply a post-calculation deduction. For compliance and auditability of data handling, follow relevant NIST and ISO guidelines when integrating this tool into a production environment.
What is the difference between reinvesting and not reinvesting?
Reinvesting buys additional shares with dividend payments, which can compound future dividend income. Not reinvesting leaves dividends as cash and does not increase share count.
Can I trust the default assumptions?
Defaults are illustrative. Tailor growth rates, share price, and horizon to your situation. For fiduciary or regulatory use, corroborate assumptions with documented research and follow industry standards for model validation.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov