Preference shares represent an ownership interest in the company but, as the name implies, preference shares receive preferential treatment over ordinary shares. Specifically, preference shareholders take precedence over ordinary shareholders in the payment of dividends and in the distribution of corporate assets in the event of liquidation. Unlike the interest payments on bonds, which are contractual obligations, preference share dividends are declared by the board of directors and, if a dividend is not paid, the lack of payment is not legally viewed as a default.

Discuss how valuing preference shares with a stated maturity differs from valuing preference shares with no maturity date.