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you have finally saved $10,000 and are ready to make your first investment. You have the three following alternatives for investing that money: Captial cities

you have finally saved $10,000 and are ready to make your first investment. You have the three following alternatives for investing that money: Captial cities ABC, Inc. bonds with a par value of $1,000, that pays and 8.75 percent on its par value in interest, sells for $1,314, and marures in 12 years. southwest bancorp preferred stock paying a dividend f $2.50 and selling for $25.50. emerson electric common stock selling for $36.75, with a par value of $5. The stock recently paid a $1.32 dividend and the firm's earnings per share has increased from $1.49 to $3.06 in the past five years. the firm expects to grow at the same rate fr the foreseeable future. your required rates of return for these investments are 6 percent for the bond, 7 percent for the preferred stock, and 15 percent for the common stock. using this information, answer the following questions. a.) calculate the value of each investment based on your required rate of return.. b.) which investment would you select? why? c.) assume emerson Electric's managers exect an earnings downturn and a resulting decrease in growth of 3 percent. how does this affect your answers to part a and be? d.) what required rates of return would make you indifferent to all options

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