About Dividend Per Share (DPS)

What is Dividend Per Share (DPS)?

Dividend Per Share (DPS) is a financial metric that measures the total amount of dividends distributed by a company to its shareholders relative to the total number of outstanding shares. It represents the portion of a company's earnings that is returned to shareholders for each share they own.

Formula for DPS

The formula to calculate DPS is:

\[\\text{DPS} = \\frac{\\text{Total Dividends Paid}}{\\text{Number of Shares Outstanding}}\]

Where:

• Total Dividends Paid is the total amount of dividends distributed by the company
• Number of Shares Outstanding is the total number of shares issued by the company

Calculation Steps

1. Determine the total amount of dividends paid by the company.
2. Identify the number of outstanding shares.
3. Divide the total dividends paid by the number of outstanding shares.

Example

Let's calculate the DPS for a company with the following financial data:

• Total Dividends Paid: $1,000,000
• Number of Shares Outstanding: 500,000

1. DPS: \(\\frac{$1,000,000}{500,000} = $2.00\)

Visual representation:

Therefore, the Dividend Per Share (DPS) for this company is $2.00, meaning each shareholder receives $2.00 in dividends for every share they own.