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May 27, 2015

How to calculate dividend percentage paid by company to shareholders?

  5/27/2015 No comments

On what basis dividend percentage calculated by any Ltd. company ? It has been always a point of concern that does a profit making company distribute a 
part of profit to its stockholders as dividend ? ..
If yes then how much they gonna pay ? The amount we always come to know that 
company is going to pay 100% dividend ,200% dividend or 50% dividend etc. But the point is on what basis they shall give 100% or 200% etc.Is it decided on 
company's share price ? 

Well it is decided over 'Face value' of company's share price.
Let us consider that a company's share price quote at $10 and its face value is $2 and company has decided to pay 100% dividend to its shareholders.Then this 
means that company is going to pay $2/equity share hold by it shareholders.
Other examples: If dividend is 40% then they gonna pay $2*(40/100)=> $0.8 per share. If dividend is 400% then they gonna pay $2*(400/100)=> $8 per share.

Author: Vikas Pandey

He is a software and web developer working for renowned European investment bank.He loves to share knowledge through blogging whatever he knows and encourages others as well to share the same to make world a better place to live.

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