A(n)_____ is a financial instrument that gives its holders a claim on a firm's earnings,paid in the form of dividends,that must be paid before dividends on its ordinary shares can be paid.

Question

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Preference shares are a type of equity security that typically pays a fixed dividend before dividends are paid to ordinary shareholders. This makes them a hybrid between debt and equity, giving preference shareholders priority over ordinary shareholders when it comes to receiving dividends. The other options listed (A, B, C) are types of bonds, which are debt securities that do not give the holder a claim on a firm's earnings.

A(n)_____ Is a Financial Instrument That Gives Its Holders a Claim