How to Calculate Preferred Stock

Obtain the original price at which the preferred stock was issued. This is called the par value and can be found in the stock's prospectus. The prospectus is located on the company website; if not, you can ask your broker to provide the information.
Obtain the preferred dividend. The dividend can be found in the prospectus or provided by your stock broker. The prospectus may present the preferred dividend as a percentage rate of the par value; this is called a dividend rate. If so, multiply the rate times the par value. This will equal the preferred dividend.For example, if the prospectus gives a dividend rate of 6 percent and a par value of $25, the preferred dividend would equal $1.50 (.06*25=$1.50).
Use an online calculator to determine the required rate of return. This is the minimum rate that investors need before they invest their money. Sites such as Moneychimp.com, Money-zine.com and Investment Analysis Calculator (see Resources), are easy to use and provide accurate calculations for the required rate of return.
Divide the preferred dividend by the required rate of return. The result is the preferred stock price. This price is the highest amount you should pay per share. If you pay any more than this, you will be overpaying.