FREE EQUITY CALCULATOR
Preferred Return Calculator
Calculate compounded preferred return on outstanding investor capital.
INDICATIVE RESULT
€1,038,848Capital plus accrued preference€5,038,848
Multiple on capital before repayment1.26x
Calculated directly from the assumptions shown.
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How the preferred return calculation works
Accrued preferred return = capital × [(1 + annual rate)^years − 1].
Example calculation
€4.0m of capital accruing at 8% for three years creates the compounded preference claim.
INVESTMENT USE
How professionals use the result
Use this to estimate the claim before distributions. A full waterfall must account for contribution and distribution dates.
Common mistakes
- Applying simple interest when the agreement compounds
- Accruing on returned capital
- Ignoring interim contributions
- Confusing preferred return with guaranteed payment
CLEAR ANSWERS