ABC Investment Advisors is considering investing in bonds and stock issued by Major Works Incorporated. As part of the decision process, ABC is estimating Major$$s bond and stock values and expected returns. Given below is the information determined by their research:

A$.$ The current market price of Major$$s outstanding corporate bonds is $107\%$ of their $$1,000$ par value. The bonds have an annual coupon rate of $6\mathrm{.}4\%$ and make coupon payments semiannually. The bonds mature in $15$ years.

B$.$ The current price of the firm$$s preferred stock is $$86\mathrm{.}00$ per share. The stock has a $$100$ par value and a $4\mathrm{.}4\%$ annual dividend rate $($paid annually$).$

C$.$ The current price of the firm$$s common stock is $$765\mathrm{.}00$ per share. Its next $($upcoming$)$ semiannual dividend will be D$1=$ $$3\mathrm{.}80$ per share. Dividends are paid semiannually and are expected to grow at an annual rate of $4\%$ into the foreseeable future. NOTE that $$3\mathrm{.}80$ is the amount of the semiannual dividend. It does not need to be divided by two. ABC Investment Advisors is basing its analysis on a required rate of return equal to $5\%$ per year.

Base$6.$ Based on the value and expected return $($#$5),$ should the common stock be purchased? Why? Be sure to base your answer on BOTH the value and the expected return.d on the information above, answer the following: