Frontiers · Global Equities · Dividends & dilution
Dividends, reinvestment and per-share economics.
Dividends, reinvestment & dilution
Separate cash distributions from reinvestment and isolate how share-count change alters per-share economics.
Distribution and share-count assumptions
Shared with every other page in this suite.
Negative share-count change represents net repurchases; positive represents net issuance. The model does not fund these corporate transactions, so growth and share-count assumptions must be reconciled outside this tool.
Cash versus reinvestment
The same company scenario, with dividends taken as cash or reinvested.
| Measure | Cash dividends | Reinvested dividends |
|---|---|---|
| Investor IRR | 7.8% | 7.8% |
| Final shares held | 831.26 | 945.27 |
| Cash distributions | $8,339 | $0 |
| Final net sale | $75,355 | $85,691 |
| Investor NPV | -$6,300 | -$6,668 |
| All modelled fees | $1,208 | $1,310 |
Cash dividends are distributed at each year-end, with no assumed return after distribution. Reinvestment buys fractional shares at that year’s scenario price and incurs the purchase fee. Withholding is deducted before either choice.
Dilution sensitivity
Arithmetic effect of the entered share-count change.
Entered share change
1% / year
Final EPS
5.05 CU
EPS with no share change
5.41 CU
NPV difference
-$2,991
All other company assumptions held fixed. This isolates arithmetic dilution; it does not credit newly raised capital with generating additional earnings.
A stock split is different.
Splits change units, not ownership.
A split changes the number of shares and the price per share proportionally. It does not, by itself, dilute an existing owner’s percentage interest. Net issuance, equity compensation, convertible securities and buybacks require a diluted share-count analysis.
Investor.gov: stock splits →Next: when a good company becomes a poor investment.
Stress tests →