The AI (ChatGPT) Dividend Handbook: Dividend Payback

Here is the response from ChatGPT for the prompt dividend payback entered on February 26, 2023.

Dividend payback refers to the period of time it takes for an investor to recover their original investment through the dividends paid out by the company in which they have invested.

To calculate dividend payback, you need to know the amount of the original investment and the annual dividend per share of the stock. The formula for dividend payback is as follows:

Dividend payback = Original investment / (Annual dividend per share x Number of shares)

For example, let's say you invested $10,000 in a company that pays an annual dividend of $2 per share, and you bought 1,000 shares of the stock. Using the formula, we can calculate the dividend payback:

Dividend payback = $10,000 / ($2 x 1,000) Dividend payback = $10,000 / $2,000 Dividend payback = 5 years

So in this example, it would take 5 years of receiving annual dividends at the current rate for the investor to recover their original investment of $10,000. Keep in mind that this calculation assumes that the annual dividend per share remains constant over time, which may not always be the case.