`"Preferred Stock Value" = "Dividend" / "Discount rate"`

Enter a value for all fields

This equation is used to compute the price of a share of preferred stock.

The preferred stock or shares is a type of stock that provides dividends ( often to a higher class of ownership in a company) prior to any dividend paid to common stocks.

EXAMPLE

Given that the par value is $100 per share, the preferred dividend rate is 8%, and the required return is 10%, find the price of a share of preferred stock.

Using the calculator above, the preferred stock price will be $80 ie.  ($100*8%)/10%