Dividend yield calculator: yield, the price for a target yield, and yield on cost
Dividend yield is the annual dividends paid per share divided by the share price, shown as a percentage. Enter a dividend and a price to get the yield, enter a target yield to get the price that produces it, or enter what you paid to get yield on cost. You supply every number; nothing is looked up, and the result is arithmetic, not a forecast.
Dividend yield calculator
Forward dividend yield
4%
$2.00 a year per share divided by a $50.00 price.
Assumptions behind these results
- Yield is annual dividends per share divided by price, shown as a percentage. The dividend and the price are the numbers you enter; no price or dividend is looked up.
- Forward multiplies one payment by the payments per year, so it assumes the payment you enter continues. Trailing adds up the payments you list for the last 12 months, including any special dividends you include.
- The result is arithmetic on your inputs. It is not a forecast and does not say whether a yield is good or bad.
Forward and trailing yield
The two names describe which dividend goes in the numerator. A trailing yield uses the dividends per share actually paid over the last 12 months. A forward yield annualizes a dividend rate expected to continue, for example the latest payment times the payments per year. When we checked on November 6, 2026, neither the Investor.gov glossary entry for Dividend nor its entry for Yield defined forward or trailing yield, so these descriptions are FedRateCalc's working definitions, and other data providers may define them differently. The Dividend entry reads:
“A portion of a company's profit paid to shareholders. Public companies that pay dividends usually do so on a fixed schedule although they can issue them at any time. Unscheduled dividend payments are known as special dividends or extra dividends.”
The Yield entry in the same glossary is about bonds, not stocks, and does not mention dividends, so it is not a definition of stock dividend yield:
“The annual percentage rate of return earned on a bond calculated by dividing the coupon interest rate by its purchase price.”
Because the first quote says unscheduled payments are known as special dividends or extra dividends, a trailing figure includes them only if you add them to the 12-month list, and a forward figure leaves them out unless you include them in the payment you enter.
Worked examples
These use round numbers to show the arithmetic. They are not data about any security.
| Example | Annual dividends per share | Price | Yield |
|---|---|---|---|
| Forward: $0.50 per quarter, four payments a year, $50 price | $2.00 | $50.00 | 4% |
| Trailing: $0.45, $0.50, $0.50 and $0.50 paid in the last 12 months, $50 price | $1.95 | $50.00 | 3.9% |
| Same $2 annual dividend, price at $80 | $2.00 | $80.00 | 2.5% |
| Same $2 annual dividend, price at $40 | $2.00 | $40.00 | 5% |
The last two rows show that a lower price gives a higher yield on the same dividend. Reverse mode runs the formula the other way: $2 a year per share at a 4% target is $50.00, and the price moves if the dividend does.
Yield on cost
Yield on cost divides the current annual dividend per share by the price you paid per share, so it compares the dividend with your purchase, not with today's price. For example, a $2.50 annual dividend on shares bought at $40 is 6.25%. When FedRateCalc checked the Investor.gov glossary entry for Dividend, the Investor.gov glossary entry for Yield and IRS Topic no. 404 on November 6, 2026, none of them used the term, so this is FedRateCalc's arithmetic. The dividend calculator reports a different figure, “yield on money put in (final year)”: the final year's dividends over the money you put in yourself, additions included, because that page tracks a whole portfolio. The two numbers answer different questions and should not be compared; the DRIP calculator shows what reinvesting does to the share count behind it.
A dividend you receive is also taxable income. The rates for qualified dividends are on the capital gains tax brackets page, and a yield here is before any tax.
Frequently asked questions
How is dividend yield calculated?
FedRateCalc divides the annual dividends per share by the share price and shows the result as a percentage. The Investor.gov glossary entry for Yield defines yield for bonds, and its entry for Dividend does not mention yield, so this stock formula is FedRateCalc's own arithmetic rather than a definition from either entry.
What is the difference between forward and trailing yield?
In FedRateCalc, trailing yield uses the dividends per share actually paid over the last 12 months and forward yield annualizes a dividend rate you expect to continue, for example the latest payment times the payments per year. When FedRateCalc checked the Investor.gov glossary entries for Dividend and Yield on November 6, 2026, neither defined forward or trailing yield, so these are FedRateCalc's working definitions and other data providers may differ.
How do I find the price for a target yield?
FedRateCalc divides the annual dividends per share by the target yield. For example, $2 a year at a 4% target gives $50. The result is arithmetic, not a price forecast, and it changes if the dividend changes.
What is yield on cost?
In FedRateCalc it is the current annual dividend per share divided by the price you paid per share. It compares today's dividend with your purchase price, so it differs from the current yield. When FedRateCalc checked the Investor.gov glossary entry for Dividend, the Investor.gov glossary entry for Yield and IRS Topic no. 404 on November 6, 2026, none of them used the term, so this is FedRateCalc's own arithmetic. The dividend calculator uses a different figure, “yield on money put in (final year)”.
Why does the yield change when only the price moves?
Because the formula divides by price: with the same annual dividend per share, a lower price gives a higher yield and a higher price gives a lower one. FedRateCalc reports the arithmetic and does not say whether a particular yield is good or bad.
Can a trailing yield include special dividends?
It can if you include them in the 12-month total. Investor.gov says public companies that pay dividends usually do so on a fixed schedule although they can issue them at any time, and that unscheduled payments are known as special dividends or extra dividends. FedRateCalc adds up whatever amounts you enter.
Related pages
Sources
- Investor.gov: Glossary, Dividend (Internet Archive capture of August 11, 2026)
- Investor.gov: Glossary, Yield (Internet Archive capture of August 11, 2026)
Reviewed November 6, 2026. FedRateCalc is not affiliated with the IRS or the SEC; their sites are the official source, and this page is general information, not tax or investment advice.