An investor is trying to decide whether to purchase stock in Henderson Inc. or Glover Corporation. Glover Corporation reported annual earnings per share of $8, and the current market price of Glover stock is $64 per share. Henderson Inc. has annual earnings per share of $4, and the current market price for Henderson stock is $84 per share. Based on this information, complete the requirements to assist the investor in making his decision.

Required
a. Determine the P/E ratio for Glover Corporation.
b. Determine the P/E ratio for Henderson Inc.
c. Assume the growth prospects for the two companies are identical. Further, assume both companies plan to distribute all future earnings as cash dividends. Under these circumstances, which company represents the best investment opportunity.