Dividend Per Share (DPS) Calculation

Definition: Dividend Per Share (DPS) ratio relates the dividends announced for the year to the number of shares issued for that year. It is an indication of the cash return that shareholders receive from holding shares in the listed company.

Formula:
Dividend Per Share (DPS) = Dividends paid to equity shareholders  / Number of issued equity shares

Example 1:
Bronze Ltd announced a total of $200,000 in dividends over the last year, and it has 4 million shares outstanding, then the DPS would be: 200,000 / 4,000,000 = $0.05 per share.

Example 2:
Calculate the DPS for Modern Product Ltd., given the following information:
Dividends proposed $30,000
Ordinary shares of $0.50 each: $600,000

Solution:
Number of shares issued = 600,000 / 0.50 = 1,200,000
DPS = 30,000 / 1,200,000 = $0.025

* Next: Cash Dividend Coverage Ratio
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