Negative Dividend Growth Formula

Negative Dividend Growth Formula

Negative Random dividend growth means that dividend has come down in relation to previous year. It means that negative growth of dividend is possible. The concept has been explained below with example

Growth =            Dividend during the year    

                            Dividend of Last Year

Example

Company ABC has paid following dividend

Year 1          12

Year 2          18        

Year 3          15

Solution

Year                              Growth

Year 1          12

Year 2          18/12         = 50%

Year 3          15/18         =(16.67)%

In above example dividend growth in year three has become negative in relation to year 2. It is important to note that this negative growth many also turn positive again.