Dividend Reinvestment Calculator
Explore how reinvesting dividends could change shares and ending value under assumptions you choose. These are scenarios, not predicted investment performance.
Reinvestment versus cash scenario
- Ending value with reinvestment
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- Ending share value plus cash without reinvestment
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- Reinvestment minus cash scenario
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Both scenarios use the same contributions and growth assumptions. Cash earns no interest. Reinvestment can produce a lower ending value when share prices decline.
Selected scenario by year
| Year | Shares | Share price | Money invested | Annual dividends | Cumulative dividends | Retained cash | Total value |
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How this DRIP scenario works
Initial shares = initial investment / initial share price. The initial annual dividend per share = initial price × initial yield. Yield is an initial input, not a percentage held constant as the share price changes.
Dividend per share for year n = initial annual dividend per share × (1 + dividend growth)^(n − 1). Year 1 uses the initial dividend. Dividend growth changes once at the start of each later year. Each scheduled payment is the shares held immediately before payment × that year's annual dividend per share / payments per year.
At month m, share price = initial price × (1 + annual price growth)^(m / 12). On payment months, dividends are either retained as cash or used to buy fractional shares at that month-end price. Then the monthly contribution buys additional shares at the same price. Payments occur at month ends: every month, months 3/6/9/12, months 6/12, or month 12. There is no immediate dividend on newly purchased shares.
Ending value = ending shares × ending share price + retained dividend cash. Total dividends includes distributions that were reinvested; it is informational and must not be added again. Full precision is used internally, while displayed dollars are rounded to cents and shares to six decimals.
Scenario limitations
This simplified model assumes fractional-share purchases with no fees, taxes, spreads, delays, withdrawals, inflation or cash interest. Reinvesting does not necessarily remove dividend tax obligations. It does not model actual declaration or ex-dividend dates, or a separate ex-dividend price drop. The price-growth input represents the assumed price path excluding dividend income, not total return; entering a total-return assumption here can double-count dividends.
Actual dividends, prices and purchase timing will vary. None of these assumptions guarantees a return. A negative dividend growth rate models cuts; a -100% rate stops dividends from year 2. Share-price growth must be greater than -100% so purchases have a positive modeled price.
Sources: Investor.gov: Dividend reinvestment plans and IRS: Reinvested dividends.