Linda Clark received $236,000 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 $100,000. The stock paid no dividends, but it was sold for $171,000 at the end of three years. b. Preferred stock was purchased at its par value of $55,000. The stock paid a 7% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $40,000. c. Bonds were purchased at a cost of $81,000. The bonds paid annual interest of $4,500. After three years, the bonds were sold for $89,000. 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 12% return, and he gave Linda the following computations to support his statement: Common stock: - Gain on sale ($171,000 $100,000) Preferred stock: Dividends paid (7% x $55,000 x 3 years) Loss on sale ($40,000 $55,000) Bonds: Interest paid ($4,500 x 3 years) Gain on sale ($89,000 $81,000) - Net gain on all investments $ 71,000 11,550 (15,000) 13,500 8,000 $ 89,050 $89,050 3 years/$236,000 = 12.60 % Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.