What is the total amount of dividends a firm pays for each share outstanding called?

The total amount of dividends a firm pays for each share outstanding is referred to as Dividends Per Share (DPS). This metric represents the cash flow returned to shareholders and is crucial for investors seeking income from their investments. DPS is calculated by dividing the total dividends paid by the number of outstanding shares. It provides a clear figure that allows shareholders to understand how much profit is being distributed from the company's earnings on a per-share basis.

For investors, DPS serves multiple important purposes—it's an indicator of a company's profitability and financial health, and it directly influences investment decisions. A consistently high or growing DPS can attract investors looking for stable income, whereas a decrease in DPS may raise concerns about a company's financial stability.

In contrast, the other terms mentioned have different meanings. Earnings Before Taxes refers to a company’s profit before tax expenses are deducted; Gross Profit Margin reflects the percentage of revenue that exceeds the cost of goods sold; Net Income measures the total profit a company has earned after all expenses, taxes, and costs have been subtracted. While each term relates to a company's financial performance, only Dividends Per Share directly correlates with the cash paid to shareholders for each share they own.