Dividend – Definition, Formula and Important Rules (2024)

A dividend is a whole number or the number of things that need to be divided into certain equal parts. There are four basic operations on numbers named as addition, subtraction, multiplication, and division. The division is a process of dividing a number into equal parts leaving behind a reminder if the given number cannot be divided into the parts equally. Thus, division with a remainder or Euclidean division contains the following:

  • Dividend - Dividend is the number that is to be divided by the divisor.

  • Divisor - The number by which the dividend is to be divided is called the divisor.

  • Quotient - The resultant of the division is called the quotient.

  • Remainder - The number that is left after division is called the remainder.

In this article, we are going to discuss the definition and formula of dividends. We will also learn the methods of finding dividends.

Division with No Remainder:

For example, you have 20 candies and you need to divide equally among 4 children. On dividing the candies equally, each one of them gets 5 candies. Consider in this case, the number of candies (i.e, 20) which was to be divided among children is called the dividend, the number of children (i.e, 4) among whom it is to be divided is called the divisor. Remember, the divisor divides the dividend or in other words dividend gets divided by the divisor. The result of the equal distribution, that is the number of candies with each member is called the quotient.

Dividend = 20

Divisor = 4

Quotient = 5

Remainder = 0

Division with the Remainder:

Consider the same aforementioned example but with a modification. Suppose this time the candies are to be distributed among 3 members, that is 20 candies are to be distributed among three children. The division is shown below:

Here, the candies are equally distributed among 3 children such that each having 6 candies but 2 candies are left which cannot be divided into three as a whole. Thus, the remainder of this division is called the remainder.

Here,

Dividend = 20

Divisor = 3

Quotient = 6

Remainder = 2.

Dividend Formula:

If the value of divisor, quotient, and remainder is given then we can find dividend divided by the following dividend formula:

Dividend = Divisor x Quotient + Remainder.

It is just the reverse process of division. In the example above we first divided the dividend by divisor and subtracted the multiple with the dividend. That means, we first divided and then subtracted. Thus, to find the dividend we need to do the opposite, that means we first need to multiply instead of dividing and then add instead of subtracting.

Here are dividend examples for you for a better understanding of the concept:

Suppose we need to divide 11 into 2 equal whole parts. The resultant will be with a remainder 1.

Here, dividend = 11, divisor = 2, quotient = 5 and remainder = 1.

As per the dividend formula,

Dividend = Divisor x Quotient + Remainder

11 = (2 x 5) + 1

11 = 10 + 1

11 = 11

LHS = RHS.

Hence the formula of dividend is

Dividend = (Divisor x Quotient) + Remainder

How to Find the Dividend?

We can find dividends by using the formula of dividends.

Example: A number is divided by 9 giving 6 as a quotient and leaving behind remainder 1. Find the number.

Solution: Let the dividend be x

x = (9 x 6) + 1

= 54 + 1

= 55

Therefore, the value of the dividend is 55.

Important Rules For Division:

Rule 1: Whenever we divide 0 by another number, the resultant (quotient) is always zero.

Examples:

(i) 0 ÷ 4 = 0

(ii) 0 ÷ 12 = 0

(iii) 0 ÷ 25 = 0

(iv) 0 ÷ 314 = 0

(v) 0 ÷ 225 = 0

(vi) 0 ÷ 7135 = 0

Rule 2: Whenever a number is divided by one, the resultant (quotient) is always the number itself.

Examples:

(i) 28 ÷ 1 = 28

(ii) 4558 ÷ 1 = 4558

(iii) 335 ÷ 1 = 335

(iv) 9387 ÷ 1 = 9387

(v) 6789754 ÷ 1 = 6789754

Rule 3: Whenever a number is divided by itself, the resultant (quotient) is always 1.

Examples:

(i) 45 ÷ 45 = 1

(ii) 98 ÷ 98 = 1

(iii) 1371 ÷ 1371 = 1

(iv) 5138 ÷ 5138 = 1

(v) 6758 ÷ 6758 = 1

Dividend – Definition, Formula and Important Rules (2024)

FAQs

Dividend – Definition, Formula and Important Rules? ›

The dividend is one of the four important parts of the division process. It is the whole which is to be divided into different equal parts. For example, if 10 divided by 2 is 5, then 10 is the dividend here, which is divided into two equal parts whereas 2 is the divisor, the quotient is 5 and the remainder is 0.

What is the formula of dividend rule? ›

Dividend Formula:

Dividend = Divisor x Quotient + Remainder. It is just the reverse process of division. In the example above we first divided the dividend by divisor and subtracted the multiple with the dividend. That means, we first divided and then subtracted.

What is the meaning of dividend formula? ›

Dividend Formula

It can be mathematically represented as division fact, such as 75 ÷ 5 = 15. In this division fact: The number 75 is the dividend. It is the number to be divided. The number 5 is the divisor.

What is the definition of a dividend in math? ›

The dividend is the number that is being divided. The number that is doing the dividing is the divisor. The quotient is the answer to a division problem, or the number of times the divisor goes into the dividend evenly. The remainder is what is left over, if anything, after dividing.

How is a dividend calculated? ›

The dividend per share is calculated using a simple method. To calculate DPS, divide the entire number of dividends paid by the company by the total number of shares held. The annualised dividend is the total amount of dividends given out during the year.

What are the rules for dividends? ›

A dividend is a payment of profit from a limited company to its shareholders. Dividends cannot be counted as business costs when working out Corporation Tax. You must also not pay more dividends than available profits from the current and previous financial years.

What is the dividends basic formula? ›

Dividend Per Share Example

Currently, there are 1 million shares outstanding. The dividend per share would simply be the total dividend divided by the shares outstanding.

How is dividend defined? ›

A dividend is the distribution of corporate earnings to eligible shareholders. Dividend payments and amounts are determined by a company's board of directors. The dividend yield is the dividend per share, and expressed as a percentage of a company's share price.

What is the formula for calculating dividend income? ›

The formula to calculate dividend yield is a fairly simple one, and you don't need any special math or financial training to be able to do it for any dividend stocks you own. All you have to do is divide the annual dividend by the current stock price, and you'll get the dividend yield.

How do you explain dividends? ›

A dividend is a portion of a company's earnings that is paid to a shareholder. The most common type of dividend is a cash payout, but some companies will issue stock dividends. Dividends are typically issued quarterly but can also be disbursed monthly or annually.

What is the dividend formula calculator? ›

Dividend Yield is calculated by dividing the annual dividend per share by the current market price per share, and then multiplying by 100 to express it as a percentage. The formula is: Dividend Yield = (Dividend per Share / Current Market Price per Share) * 100.

How to calculate dividend yield formula? ›

The formula for calculating the dividend yield is equal to the dividend per share (DPS) divided by the current share price. For example, if a company is trading at $10.00 in the market and issues annual dividend per share (DPS) of $1.00, the company's dividend yield is equal to 10%.

What can a dividend be defined as? ›

Dividends are a form of income that shareholders of corporations receive for each share of stock that they hold. These payments -- from a corporation's profits or from its accumulated retained earnings -- are in cash or other assets (excluding the corporation's own stock).

What is the formula for the dividend rule? ›

For dividend, the formula is: Dividend = Divisor × Quotient + Remainder. For divisor, the formula is: Dividend/Divisor = Quotient + Remainder/Divisor.

What determines dividend amount? ›

Dividend payments represent portions of profits companies share with their stockholders, usually on an annual or quarterly basis. The dividend you receive is based on the number of shares you own and the percentage of profit a company will use for dividends.

What is an example of a dividend? ›

For example, if a company issues a stock dividend of 5%, it will pay 0.05 shares for every share owned by a shareholder. The owner of 100 shares would get five additional shares.

What is the formula for dividend decision? ›

= the earnings per share at the end of year 1, (1 - b) = the fraction of earnings the firm distributes by way of dividends, b = the fraction of earnings the firm retains, k = the rate of return required by the shareholders, r = the rate of return earned on investments made by the firm, and br = the growth rate of ...

What is the rule for dividend? ›

Section 123(1) of the Act inter-alia states that “no dividend shall be declared or paid by a company for any financial year except out of the profits of the company for that year or out of the profits of the company for any previous financial years”.

What is the formula for dividend ratio? ›

How Do You Calculate the Dividend Payout Ratio? It is commonly calculated on a per-share basis by dividing annual dividends per common share by earnings per share.

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