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10 Assume a perfect capital market, in which the shares of company Z are traded. The expected earnings per share (EPS) at t= 1 are 1.1. Firm Z pays out all its earnings as dividend (ie the dividend pay out ratio is 100%). The expected perpetual growth of the earnings per share equals 0.0%. At to the price per share is 10.0. The management of firm Z is considering (at t = 0) to invest in the growth of the firm (and therefore also in the growth of the earnings and dividends per share). The investments will be financed out of the retained earnings. From t = 1 onwards the dividend pay-out ratio will be decreased from 100% to 60% and the retained earnings will be invested in growth. The expected return on these new investments (roni) is 11.0%. The required rate of retum (1) does not change due to this proposed change in the investment policy. Which of the following statements below is correct? 1.Op The net present value of the growth opportunities (NPVGO) is negative. The net present value of the growth opportunities (NPVGO) zero. The net present value of the growth opportunities (NPVGO) is positive