Linda Clark received $110,000 from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's behalf a Common stock was purchased at a cost of $80,000. The stock paid no dividends, but it was sold for $130,000 at the end of three years. b Preferred stock was purchased at its par value of $35,000. The stock paid a 4% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $26,000. Bonds were purchased at a cost of $54,000. The bonds paid annual interest of $1,000. After three years, the bonds were sold for $55,000. The securities were all sold at the end of three years so that Linda would have funds available to open a new business venture. The broker stated that the investments had earned more than a 14% return, and he gave Linda the following computations to support his statement: Common stock 50,000 Gain on sale (S130,000-$80,000) Preferred stock: Dividends paid (4% x $35,000 x 3 years) 4.200 Loss on sale (S26,000 $35,000) (9,000) Interest paid ($1.000 x 3 years) 3,000 Gain on sale ($55,000-$54,000) 1,000 49,200 Net gain on all investments $49,200 3 years 14.9% $110,000