• E is the total equity ($) • PFR is the preferred rate (%) To calculate the Preferred Return, multiply the total equity by the preferred rate. ## How to Calculate Preferred Return? The following steps outline how to calculate the Preferred Return. 1. First, determine the total equity ($).
2. Next, determine the preferred rate (%).
3. Next, gather the formula from above = PR = E * PFR/100.
4. Finally, calculate the Preferred Return.
5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem :

Use the following variables as an example problem to test your knowledge.

total equity (\$) = 100,000

preferred rate (%) = 5