Anita Vasquez received $240,000 from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Anita's behalf
| a. |
Common stock was purchased at a cost of $120,000. The stock paid no dividends, but it was sold for $260,000 at the end of four years.
|
| b. |
Preferred stock was purchased at its par value of $18,000. The stock paid a 10% dividend each year for four years. At the end of four years, the stock was sold for $15,000.
|
| c. |
Bonds were purchased at a cost of $102,000. The bonds paid $6,120 in interest every six months. After four years, the bonds were sold for $105,000.
|