Comapny X has dividend payout ratio of 20% and earned $1.5 per share
in the year just ended.  Starting now, company X's profits will grow
at a 10% compound annual rate, the payout ratio will rise to a steady
level of 25% and the require rate of return is 11%.
 a. What current value would I assign to the stock of company X?
 b. Use the infinite period (constant growth model) to determine its price-
    earning ratio on this year's earnings.  
 c. I want to ignore the dividend return, given my annual require return, and 
    assuming that the stock sells at the value in part (a) at the eand of one 
    year.  Please explain whether I would buy the stock now at a price of $48 
    and at $35.  Please shows calculations so that I can better understand 
    whether I should consider this stock for my 401K.

You don't have to fib and say this is for your 401(k). It's a rather
standard homework question. Didn't you pay attention during Ethics?