This cost of preferred stock excel calculator lets you calculate the cost of preferred shares, given the stock price and dividend. The cost of preferred stock is the amount a company has to pay back to preferred shareholders in return for the income it receives from issuing and selling the stock. Companies can choose to issue debt, common shares, preferred shares, or other instruments to raise capital, and they often need to calculate metrics to compare the efficiency of different approaches to raising capital. Cost of preferred stock is one of the most helpful metrics to look at, and it is an important component to calculate the weighted average cost of capital (WACC). The formula for calculating the cost of preferred stock is essentially a perpetuity formula: Rp = D / P0 Where: Rp = Cost of preferred stock D = Dividend P0 = Current stock price   If you’d like to see more examples beyond this cost of preferred stock excel calculator, make sure to look at all the Capital Structure templates on CFI Marketplace.