Q. You have finally saved $10,000 also are ready to make your first investment. You have the three subsequent alternatives for investing that money:

Your required rates of return for these investments are 6% for the bond, 7% for the preferred stock also 15% for the common stock. Using this information, answer the subsequent questions:

A. Calculate the value of each investment based on your required rate of return.

B. Which investment would you select? Explain why?

C. Assume Emerson Electric's Managers expect an earnings downturn also a resulting decrease in growth of 3%. Explain how does this affect your answers to Part A also B?

D. Illustrate what required rates of return would make you indifferent to all these options?