# Quick Answer: How do you calculate preferred stock dividends per share?

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## What is the formula for preferred stock?

Here’s an easy formula for calculating the value of preferred stock: Cost of Preferred Stock = Preferred Stock Dividend (D) / Preferred Stock Price (P). Par value of one share of preferred stock equals the amount upon which the dividend is calculated. In other words, par value is the face value of one share of stock.

## What is the dividend on an 8 percent preferred stock?

What is the dividend on an 8 percent preferred stock that currently sells for \$45 and has a face value of \$50 per share? 12.4 percent.

## How do you calculate the number of preferred shares?

You can find this information on the prospectus for the preferred stock. For example, assume the par value of the preferred stock \$12. Multiply the number of preferred shares outstanding by the par value of the preferred stock. Continuing the same example, \$100,000 x \$12 = \$1,200,000.

## How do you calculate annual dividends on preferred stock?

To find the annual dividend, multiply the par value by the dividend rate. For example, if the preferred shares have a par value of \$50 and a dividend rate of 6 percent, multiply \$50 by 0.06 to find that the preferred share pays a \$3 annual dividend.

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## Is preferred stock the same as preferred dividends?

Preferred dividends are issued based on the par value and dividend rate of the preferred stock. While preferred dividends are issued at a fixed rate based on their par value, this may be unfavorable in high inflation periods.

## Is a company required to pay preferred dividends?

Preferred stock shareholders must be paid a dividend before common stock shareholders receive a dividend. This means a company cannot pay a common stock dividend and then not pay a preferred stock dividend.