Noncumulative preferred stock is a type of preferred stock that does not accumulate dividends in the event the company misses a dividend payment. Noncumulative preferred stock does, however, receive preferential payouts in the event of a company liquidation and also has priority over common shareholders to receive regular dividend payments. You can calculate the value of your noncumulative preferred stock based on the stocks par or issue value.
1. Determine the number of shares of noncumulative preferred stock held in your portfolio. For example, assume you have 1,000 shares of a company's noncumulative preferred stock.
2. Determine the par value of the noncumulative preferred stock. You can find the par value listed on the prospectus for the preferred stock.
3. Multiply the number of shares held by the par value of the noncumulative preferred stock. Continuing the same example, 1,000 x $12 = $12,000. This figure represents the value of your noncumulative preferred stock.
- "Principles of Finance"; Scott Besley and Eugene Brigham; 2008
- Accounting Coach: Noncumulative Preferred Stock Definition
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