Calculating your annual dividend growth rate is straightforward once you know the Dividend Growth Rate formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Dividend Growth Rate Calculator.
What is Dividend Growth Rate?
The Dividend Growth Rate calculation tells you your annual dividend growth rate from a few simple inputs. The figure you are solving for here is the annual dividend growth rate, expressed in percent.
The Dividend Growth Rate formula
The core formula is:
Annual dividend growth rate = ((Later dividend ÷ Earlier dividend)^(1 ÷ Years between) - 1) × 100Here is what each input means:
- Earlier dividend — a money amount. Example: ₹10.
- Later dividend — a money amount. Example: ₹20.
- Years between — a number. Example: 5.
How to calculate it step by step
- Write down the earlier dividend (for example, ₹10).
- Write down the later dividend (for example, ₹20).
- Write down the years between (for example, 5).
- Apply the formula above to get your annual dividend growth rate.
- Double-check the result with the Dividend Growth Rate Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Earlier dividend | ₹10 |
| Later dividend | ₹20 |
| Years between | 5 |
| Annual dividend growth rate | 14.8698% |
With earlier dividend of ₹10, later dividend of ₹20 and years between of 5, the annual dividend growth rate works out to 14.8698%.
Example 2
With earlier dividend of ₹20, later dividend of ₹20 and years between of 5, the annual dividend growth rate works out to 0.0000%.
| Result | Value |
|---|---|
| Annual dividend growth rate | 0.0000% |
Example 3
With earlier dividend of ₹5, later dividend of ₹20 and years between of 5, the annual dividend growth rate works out to 31.9508%.
| Result | Value |
|---|---|
| Annual dividend growth rate | 31.9508% |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Dividend Growth Rate Calculator does it instantly, for free, with the formula and a worked example built in.
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