WhatsApp us

Accounting Homework Help

5 Easy Steps of Calculating Dividends Homework Answers

by Jul 9, 2017Accounting

Let us first start with a little introduction with dividend. What actually is a dividend?

Dividend is actually a partial distribution of the company’s earning to the shareholders of that particular company. These can be issued by the likes of either share of stocks, or as cash payments or any other property too.When a company is earning its profit, it is partially distributed to the shareholders of the company and the part that is retained by the company is termed as the retained earnings.

Dividends are very important in mathematics also in the share market as everything depends on it. To start with, dividends homework answers should be practised from the questions to improve the skills.

To improve the dividends homework answers, let us see how to calculate the dividends first:

  1. We should determine the number of stock shares held by an individual

It is an important task to identify the number of shares possessed by an individual. If unknown, it is the first task to find out. This information can be extracted by contacting with the investment agency or the broker.

  1. Identify the dividend that is paid per share of the company stock

To begin with; we should have the idea of the company’s dividend per share value., i.e. DPS value. This is represented by the dividend money that is awarded for each share owned by the company. Thus by the formula:

DPS = ( D- SD ) /S

(Where D is the total money paid amount n dividend,SD is the amount of money paid in special one-time dividends. S is the number of the total company stocks that is owned by the investors)

  1. For calculating this, one needs to find out the value of SD and also D on the cash flow of the company’s statement and also the S of the balance sheet.
  2. A company’s dividend rate of payout always changes with time. Since these payout rates constantly change, if an individual is using past dividend values to estimate the amount they will be getting paid, then the calculation will not be accurate.
  3. Multiplying the DPS with the number of shares –Suppose an individual knows the number of shares of the company stock he or she is holding, and also the DPS of the company for the most recent time period. In this case, it becomes easier to find the amount of dividend that individual is going to earn.

By using the formula: D = DPS * D (where D is your dividend, S is the number of the total shares owned by you). You can get the result by simply multiplying the DPS and S, D. Calculation, in this case, is easy. Also, it is important to look that if an individual is using the past values of the company’s past DPS value, the dividend return that is found out after the calculation can differ a lot too what is calculated as dividend return of company changes with a change in time.

  1. Example: Assume a person owns 100 share of stocks of a certain company that paid 65 dollars per share in last year’s dividend. Then applying these values in the formula, it is seen that the D will be65 dollars. And also the fact that if a company’s previous year’s dividend equals to this year’s dividend, there turn will be same as 65 dollars.
  2. Using a calculator

When you are calculating dividend for many stock holdings and also dealing with large numbers at the same time, it is easier to use a calculator. It can be taken as doing simple mathematical multiplication without which the work can be difficult and exhaustive.

  1. Accounting for the reinvestment

These processes above are actually beneficial to use for simple calculation cases like when the total number of stocks owned is fixed. But in real life, investors generally use the dividend earning to buy more shares of stocks, the procedure which is termed as the “dividend reinvestment”. By this, the investor sacrifices the short term dividend return and focuses in the future for a bigger return on dividend.

Example of it can be taken for a person who earns $200 per year in return from one investment, and he invests 100$ from that amount to buy more shares from other company stocks. This way, his return will get sacrificed, but in future, he will get more return from the stock dividend per year. Thus by sacrificing for the short term, he will make a bigger dividend return in the future.

By keeping in mind all these factors while finding dividends homework answers,  it will be easier to make and calculate using the correct processes. Though there are also many websites like homework help that offer courses around the internet, some being free, while some charges for their courses.

But there is a saying, ‘practice makes a man perfect.’ By keeping these processes into consideration, it will be easy to calculate dividend in the future.

Dividends homework answers can sometimes be tough, if needed it okay to seek help from others when necessary, especially from those who has a lot of expertise in this field. Also to know more about these processes, and to get deeper topic insight, one should ask a subject matter expert as they have more details both in academic as well as professional fields. So if you wish to know the correct way to write dividends homework answers it is best to take help from professional for best results.