What does this preferred-share yield worksheet calculate?
This worksheet compares an annual preferred dividend with two per-share values: an issue or liquidation preference amount that you enter, and a current market price that you enter. It also estimates gross annual income for a share count. It does not look up a security, confirm a dividend, or forecast future payments.
The stated rate on issue value is annual dividend per share divided by issue value per share, multiplied by 100. Current yield uses the same dividend divided by the entered current share price, multiplied by 100. For example, an entered $2 annual dividend, $25 issue value, and $22 current price produce an 8% rate on issue value and about 9.09% current yield. For 100 shares, the arithmetic gross annual income is $200. This is a hypothetical example, not a quote or a claim about a particular security.
Why can the two yield figures differ?
The denominators differ. The issue-value rate relates the dividend to the issue or preference value you provide. Current yield relates it to the price you enter for comparison. If the entered market price falls while the dividend input stays fixed, the calculated current yield rises; if price rises, it falls. That relationship is arithmetic and does not establish whether the price or dividend is appropriate.
Investor.gov explains that preferred shareholders generally receive dividends before common shareholders and usually have less voting power. The exact rights and terms depend on the security. Read the issuer's prospectus and subsequent filings for its dividend, cumulative status, liquidation preference, redemption or call features, and other terms. Source: Investor.gov, Stocks - FAQs, accessed 2026-11-03.
What does current yield leave out?
Current yield is not yield to call, yield to worst, or total return. It does not account for what an issuer might pay if it redeems a callable preferred share, when a redemption could occur, any difference between purchase price and redemption amount, a sale price, or the timing and reinvestment of dividends. A security may have adjustable, cumulative, noncumulative, or other terms that a simple ratio cannot represent.
The income estimate assumes the annual per-share dividend entered applies to every share for a full year. It does not verify an announced payment, model skipped or changed dividends, prorate holding periods, or include taxes, fees, or currency conversion. Use values from documents that match the specific share class and check issuer and broker records independently.
Sources and date: Investor.gov, Stocks - FAQs, accessed 2026-11-03. All output calculations use user-entered values and are reviewed 2026-11-03. This educational worksheet is not financial, tax, or legal advice.
Frequently asked questions
How is preferred-share current yield calculated?
It divides the annual dividend per share you enter by the current share price you enter and multiplies by 100.
Why compare yield on issue value with current yield?
The issue value calculation shows the dividend as a percentage of the entered issue or liquidation preference value; current yield uses the share price you enter. A price change can make these percentages differ.
Does current yield include a call price or guarantee future dividends?
No. It is an input-based ratio and does not model a call or redemption, future dividends, taxes, fees, or total return.
Does this worksheet use live market data?
No. All security values are entered by the user and stay in the browser.