You have just received $4,000 from an uncle and you have decided to invest the money in shares of Electronic Recycling Inc. (ERI), a company that is listed on the Toronto Stock Exchange. ERI has common shares; cumulative preferred shares; noncumulative, convertible preferred shares; and noncumulative preferred shares.

• Common shares are trading at $40.00 and currently are paying a dividend of $2.40 per share.

• Cumulative preferred shares are selling at $50.00 and have a stated dividend of $3.50.

• Convertible preferred shares are selling for $78.50 and are convertible at the rate of 2 common for 1 preferred; the dividend rate is $5.30.

• Noncumulative preferred shares are trading at $25.00 and have a dividend rate of $1.55.

Required

Evaluate each of the four different shares as an investment opportunity. After performing your analysis, select which shares you will buy and explain your choice.