Value perpetual preferred stock that pays a fixed rate and cannot be called

A non-callable, fixed-rate perpetual preferred share pays the same dividend for ever, so it is simply the constant-growth model with zero growth. Its value is the annual preferred dividend divided by the required return on the preferred share: V0 = D ÷ rp. The dividend is usually quoted as a percentage of par, so a 6% preferred with a par value of 50 pays 3 a year. Like a perpetual bond, its value falls when required yields rise. Rearranging gives the yield implied by a market price, rp = D ÷ P. Common slips are dividing the dividend rate by the yield without applying it to par first, and discounting at the common equity return rather than the preferred's own required return.