Frequently Asked Questions
What is dividend yield?
The annual dividend income a share pays, expressed as a percentage of its current price. A ₹500 share paying ₹20 a year in dividends has a 4% yield — it tells you the cash return from dividends alone, separate from any change in the share price itself.
What does DRIP actually mean?
Dividend Reinvestment — instead of taking dividend payouts as cash, you use them to buy more shares of the same stock automatically. Over many years, this compounds: more shares means a larger next dividend payout, which buys even more shares, and so on.
How realistic are the growth-rate assumptions?
Both dividend growth and share price growth are assumptions you set — this projects forward mechanically from whatever numbers you enter, the same way a compound interest calculator does. Real markets don't grow in a straight line, so treat the output as an illustration of the compounding mechanism, not a forecast.
Is DRIP always the better choice over taking dividends as cash?
It depends on your goal — DRIP maximizes long-term compounding if you don't need the income now, while taking dividends as cash makes sense if you're relying on them for regular income. There's no universally correct answer; it's a personal cash-flow decision.