You have retired after a long and successful career as a business executive and now spend a good portion of your time managing your retirement portfolio. You are considering three basic investment alternatives.

You can invest in (1) corporate bonds currently paying 7 percent interest, (2) conservative stocks with average dividend yields of 5 percent and dividend payouts in excess of 80 percent of current earnings, and (3) growth-oriented technology stocks that pay no dividends. Analyze each of these alternatives and select one. Justify your selection.