Within the investment portfolio, the allocation of money for shares will be invested in about 20 stocks such that the portfolio is well diversified. Marion is considering two stocks as described below.

Black Limited

- share price AUD13.75

- projected earnings per share AUD1.50

- projected dividend per share nil

- average price earnings ratio for similar companies 10.5 to 1

White Limited

- share price AUD8.00

- projected earnings per share AUD0.90

- projected dividend per share AUD0.60

- average price earnings ratio for similar companies 9.5 to 1

Black is regarded by analysts as a growth stock.White is regarded by analysts as an income stock.

Lee has requested your advice on whether or not to invest in Back and/or White. She is prepared to invest up to a total of AUD10,000.

The investment could be in Black (only) or in White (only) or in Black and White (in any proportion provided the total equals AUD10,000). Or, of course, no investment in either of these two companies is possible.

Appraise Black and White and make a recommendation. In your response make sure you clearly set out your reasons.