GROWTH, Inc.s next year earning is expected to be $6 per share. The company pays out 2/3 of its earning as dividend. Both dividends and earnings are expected to grow by 10% a year for the first 5 years, and grow by 4% a year indefinitely thereafter. STABLE, Inc. is like GROWTH in all respects except that its growth will stop after year 5. In year 6 and afterward, it will pay out all earnings as dividends. The discount rate for both companies is 8%.

b) What are the P/E ratios for each company?