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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Kelvin Wong Loke Yuen is an experienced writer with a strong background in finance, specializing in the creation of informative and engaging content on topics such as investment strategies, financial ratio analysis, and more. With years of experience in both financial writing and education, Kelvin is adept at translating complex financial concepts into clear, accessible language for a wide range of audiences. Follow him on: LinkedIn.

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