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Saturday, August 20, 2011

How to Calculate Preferred Dividends

Preferred stock (or preference shares) is a special class of stock that pays a fixed dividend set at the time of issuance. Also, preferred dividends must be paid before common stock dividends. To calculate the dividends for preferred stocks, you need to multiply the par value of the shares by the dividend percentage.

Example 1:
If the dividend percentage is 8 percent and the preferred stock was

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