Assuming all of the following firms have a required return of 14 percent, which would you expect to have a positive present value of growth opportunities?
A) a firm with a P/E ratio of 6.
B) a firm with a P/E ratio of 9.
C) a firm with an E/P ratio of 20 percent.
D) None of the choices are expected to have positive PVGO.
Answer: B) a firm with a P/E ratio of 9.
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