# How Do I Calculate Cash Dividends?

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Cash dividends are generated by corporations and mutual funds and paid to shareholders as distributions of corporate profits. Cash dividends may be calculated and distributed on a per-share basis. They may also be issued as a total amount based on the number of shares that you own as a shareholder.

Cash dividends may also be computed and issued as the dividend yield on your total investment. Remember that dividends count as regular income and cannot be reported as capital gains on your tax returns.

## Cash Dividend Per Share Formula

There is a convenient cash dividend per share formula that you can easily use to determine your per-share dividend yield. After buying stock that pays cash dividends, you as the shareholder typically receive quarterly dividend checks. For instance, if you own ​2,000​ shares of Company X, Inc. stock, you may be issued a quarterly dividend payout of ​\$900​.

To compute your dividend payment per share, divide your ​\$900​ payment by the total number of shares that you own. By dividing ​\$900​ by ​2,000​ shares, you can determine the per-share amount that you receive, which is ​\$0.45​. You can also calculate the amount of your annual cash dividend by multiplying your quarterly dividend figure by ​4​. In this example, your annual dividend equals ​\$1.80​ per share.

Once you know the annual dividend per share of a stock, you can compute potential dividend income from buying that stock. You can calculate the payout amount you will be issued when you own a specific number of shares. To determine this amount, multiply the annual cash dividend per share by the number of shares that you intend to buy.

For example, if a stock pays ​\$1.25​ per share, it will pay ​\$1,250​ on ​1,000​ owned shares. The quarterly payout can be calculated by dividing ​\$1,250​ by ​4​, which equals ​\$312.50​ per quarter.