1. A positive value for PVGO suggests that the firm has:
A) A positive return on equity
B) A positive plowback ratio
C) Investment opportunities with superior returns
D) A high rate of constant growth
2. You have $100,000 to invest in either stock D, Stock F, or a risk-free asset. ou must invest all your money. Your goal is to create a portfolio that has an expected return of 9.9 percent. Assume D has an expected return of 12.8 percent, F has an expected return of 9.3 percent, and the risk-free rate is 3.8 percent. Required: If you invest $50,000 in Stock D, how much will you invest in Stock F?