How is the valuation of preference share done? Explain using a hypothetical example.

Valuing preference shares involves assessing the present worth of future cash flows the shareholder expects to receive from owning the shares. Unlike common shares, preference shares come with specific rights and privileges, such as priority in dividend payments and repayment of capital in case of liquidation. These unique features influence how preference shares are valued.

To explain the valuation process, let's consider a hypothetical example:

Suppose Company XYZ issued preference shares with the following characteristics:

1. Face value per preference share: $100
2. Dividend rate: 8% per ___ ___ ______ ___ ____ ___ _____ _______ ______ ________ ___.
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