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How do I convert quarterly dividends in monthly dividends? It is ok to just divide by three the quarterly dividend?

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    For what purpose?
    – littleadv
    Commented Oct 7, 2014 at 17:00
  • I want to calculate the monthly return of a stock, using this formula
    – Josemaria
    Commented Oct 7, 2014 at 17:13

1 Answer 1

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Technically you should take the quarterly dividend yield as a fraction, add one, take the cube root, and subtract one (and then multiple by the stock price, if you want a dollar amount per share rather than a rate). This is to account for the fact that you could have re-invested the monthly dividends and earned dividends on that reinvestment.

However, the difference between this and just dividing by three is going to be negligible over the range of dividend rates that are realistically paid out by ordinary stocks.

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