Dividend Growth Yield on Cost Calculator

Purpose and model boundary

This calculator projects the dividend income of one stock year by year. You enter the shares you own today, the share price, the yearly dividend per share, how fast the dividend and the share price grow, how many years to project, whether the dividends are reinvested and the tax rate on dividends. The main result is the dividend income after tax in the last year. The page also shows the yield on cost in that year, which is that year's dividend per share over the price you pay today, the total income after tax over all the years, the shares you own at the end when the dividends are reinvested, and what those shares are worth. A chart sets the yield on cost against the yield a new buyer would get in the same year.

Every figure on this page is computed by the spreadsheet; the page adds nothing to it. To see a balance grow at a steady rate, use the Compound Interest Growth Calculator; to take inflation out of a return, use the Real vs Nominal Return Calculator.

The model is educational. It is not a forecast of any company's dividends or share price, and it is not financial, investment, tax or legal advice.

Inputs and units

• Shares you own today, from 0.001 to 1,000,000,000. Fractions are allowed, as many brokers sell them.
• Share price today, in dollars per share, from 0.01 to 1,000,000. Your yield on cost divides each year's dividend by this price.
• Yearly dividend per share, in dollars, the dividends one share is expected to pay over the next 12 months, from 0 to 1,000,000 and not more than the share price.
• Expected yearly dividend growth and expected yearly share price growth, each from -20% to 25% a year. A negative rate is a dividend or a price that shrinks.
• Years to project, a whole number from 1 to 50.
• Reinvest the dividends, Yes or No. Yes buys more shares with each year's dividends after tax, as a dividend reinvestment plan does; No takes them as cash.
• Tax rate on dividends, from 0% to 60% of the dividends. Enter 0 for an account where dividends are not taxed.

Every input is required. Money is in US dollars; rates and yields are percentages.

Governing relationships

Write D for the dividend per share today, P for the share price today, g for the dividend growth, h for the price growth, τ for the tax rate and S for the shares you own today. In year t, from 1 to the years you project:

• the dividend per share is D(t) = D × (1 + g)^(t − 1), so year 1 pays the dividend you enter and growth applies from year 2;
• the share price is P × (1 + h)^(t − 1) at the start of the year and P × (1 + h)^t at its end;
• the shares held during year 1 are S; the dividends are paid once, at the end of the year, on the shares held during it;
• the tax is τ times the year's dividends, and the income after tax is the rest;
• with reinvestment, the income after tax buys income ÷ (that year's closing price) more shares, which are held from the next year; without it, the share count stays at S.

The income from your original shares is S × D(t) × (1 − τ), and the income from reinvested shares is the rest of the year's income after tax. The yield on cost in year t is D(t) ÷ P. The yield for a new buyer in year t is D(t) divided by the price at the start of that year, so in year 1 both equal the dividend yield today, D ÷ P.

Without reinvestment the last year's income is S × D × (1 − τ) × (1 + g)^(Y − 1) for Y years, and the total over the years is S × D × (1 − τ) × ((1 + g)^Y − 1) ÷ g when g is not 0. With reinvestment, the share count grows in year t by a factor 1 + D(t) × (1 − τ) ÷ (P × (1 + h)^t), the dividend after tax over that year's closing price. With a flat dividend and a flat price (g = h = 0), that factor is the same every year, 1 + D × (1 − τ) ÷ P.

Calculation sequence

The spreadsheet first checks every input. It then fills one row per year, up to 50, with the dividend per share, the prices at the start and end of the year, the shares held, the dividends and the tax, the income after tax split between your original and your reinvested shares, the shares bought, the yield on cost and the yield for a new buyer. Rows past the years you project stay blank. The results are read from the last projected year and from the totals of the rows, and a block of consistency checks confirms the arithmetic before the status is returned.

Outputs and interpretation

The headline is the dividend income after tax in the last year. Beside it are the yield on cost in that year, the total income after tax over all the years, the shares you own at the end (shown only with reinvestment, since otherwise the count never changes) and the value of those shares at the last year-end price. The year-by-year table shows every row of the projection. The first year's income, the dividend yield today, the yield for a new buyer in the last year, the share of the last year's income that comes from reinvested shares, the total tax on dividends, the cost of your shares today and the workbook's self-check are returned to the API and MCP.

With the first example, 200 shares at $50 paying $1.50 a share (a 3.0% yield), the dividend growing 6% and the price 5% a year, reinvested for 25 years and taxed at 15%, the last year's income after tax is $1,963.30, the yield on cost 12.15% and the total income $20,982.38; you end with about 391.9 shares worth $66,356.26. Taken as cash, the same dividends give $1,032.48 in the last year and $13,990.45 in total. The yield on cost is the same 12.15% either way, because it depends only on the dividend per share and the price you paid; reinvestment changes the number of shares, not the yield on each one. A new buyer in year 25 would get only about 3.77%, because the share price has grown too.

The income chart draws two areas from zero: the darker one is what your original shares pay, and the band above it, up to the total, is what the reinvested shares pay. Without reinvestment the two areas coincide. The yield chart draws the yield on cost and, dashed, the yield for a new buyer; when the dividend and the price grow at the same rate, the dashed line stays flat at today's yield.

Validation and status logic

The workbook evaluates the conditions below from top to bottom and returns the first matching status.

NOT VALID is a refusal, not a numeric answer: every number reads zero and the table is empty. CHECK accompanies a computed result but calls for the stated review. The self-check is reported separately as arithmetic-integrity evidence; it does not replace this ordered status chain.

Assumptions and limitations

The dividend and the share price each grow at one constant rate for the whole projection. Dividends are paid once a year, at the end of the year, and taxed at one flat rate you enter; the model does not separate qualified from ordinary dividends, apply tax brackets or tax the shares when they are sold. Reinvestment buys fractional shares at the closing price of the year with no fees and no discount. Amounts are nominal, with no allowance for inflation. A real company can cut, suspend or raise its dividend in ways a constant rate cannot show, so the later years of a long projection are the least certain.

Restrictions and non-computing states

This calculator enforces its numeric and choice limits before it accepts a result. The dividend per share may not exceed the share price, a starting yield of at most 100%; this also keeps every projected figure a finite number at the widest inputs. The projection holds at most 50 years.

Errors and warnings

A request rejected by the page's input limits is not a computed result. A transport or service failure cannot establish a fresh workbook answer. Review the workbook's References and Disclaimer, and check any plan with a qualified professional before using a result for a real decision.

Sources and further reading

The model's shares, prices, dividends, growth rates and tax rate come from the inputs, not market data. The workbook's References sheet identifies the calculation sources. The links below explain the rules and methods the model follows; they do not endorse this calculator.

• IRS Publication 550, Investment Income and Expenses (2025), "Dividends Used To Buy More Stock", explains that dividends used through a dividend reinvestment plan to buy more shares are still reported as dividend income, which is why the calculator taxes each year's dividends before it reinvests them (retrieved 2026-10-15).
• IRS Topic 404, "Dividends and other corporate distributions", explains that taxable dividends are ordinary dividends and that qualified dividends can be taxed at the lower capital gain rates. The calculator applies the one flat rate you enter instead (retrieved 2026-10-15).
• Microsoft Support's INDEX and SUMPRODUCT documentation describe the lookup and summing functions the workbook uses to read the last projected year and to check its totals.

The projection itself is compound growth applied year by year; the methodology states every relationship it uses.

This is an educational estimate, not financial, investment, tax or legal advice. Dividends, prices and tax rules change; check any plan with a qualified professional.