The dividend rate is the total expected dividend payments from an investment, fund, or portfolio expressed on an annualized basis plus any additional non-recurring dividends that an investor may receive during that period. It is closely related to dividend yield and is sometimes used interchangeably. The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the price per share. It is also a companys total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. The dividend rate can be described as the amount of cash received by a shareholder, divided by the market value of the stock held by that shareholder. On a per-share basis, the dividend rate is the amount of annual dividend per stock, divided by the current price of the stock. Dividend rates can vary greatly across companies and industries. A high dividend rate provides two clear and distinct signals to the market. First, it indicates that the management believes in the company’s.

To calculate the dividend rate, the most recent periodic dividend payments are multiplied by the number of payment periods in one year. For example, if a fund of investments pays a dividend of 50 cents quarterly and also pays an extra dividend of 12 cents per share because of a nonrecurring event from which the company benefited, the dividend rate is calculated by multiplying 50 cents by four (the number of quarters in a year) and adding the extra dividend of 12 cents, which equals $2.12. The dividend payout ratio is another way of looking at dividends, and in certain circumstances, it may shed some light on whether a big dividend is sustainable.