Linda Clark received $175,000 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 $95,000. The stock paid no dividends, but it was sold for $160,000 at the end of three years. b. Preferred stock was purchased at its par value of $30,000. The stock paid a 6% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $27,000. c. Bonds were purchased at a cost of $50,000. The bonds paid annual interest of $6,000. After three years, the bonds were sold for $52,700. 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 16% return, and he gave Linda the following computations to support his statement Common stock: Gain on sale ($160,000 - $95,000) Preferred stock: Dividends paid (6% $30,000 - 3 years) Loss on sale ($27,000 $30,000) Bonds: Interest paid ($6,000 3 years) Gain on sale ($52,700 - $50,000) Net gain