How it works
Dividend reinvestment (DRIP) uses each payout to buy more shares, which then generate their own dividends — a compounding cycle. The gap versus taking cash dividends grows exponentially the longer you hold. This simulator assumes a constant yield and price growth rate each year.
FAQ
Q. Does this account for dividend tax?
A. No — this is a pre-tax theoretical figure. In practice, only the after-tax amount (typically minus 15.4%) gets reinvested, so real results run somewhat lower.
Q. Will the dividend yield really stay constant?
A. In reality, dividends can rise or fall with company performance. This tool assumes a constant rate for simplicity.