A shareholder of Company B is concerned about the recent performance of the company. She has collected the following financial information.

Year to 31 December	2019	2020	2021
Revenue in £'m	9.4	9.6	10.2
Earnings per share in pence	62.3	67.4	59.4
Dividend per share in pence	34.6	35.6	37.4
Closing ex-dividend share price in £	7.2	7.9	6.6
CAPM expected return (%)	10	12	9

The finance director of Company B proposes that it will pay no dividend in 2022, 2023 and 2024. The company will pay a dividend per share of 62 pence in 2025. It will then grow at 4% per year in 2026 and beyond.

The expected cost of equity of Company B is 10% per year for 2022 and onward.

Dividend is paid at the end of each year.

Required

(b) (i) We define the predictive P/E as price at the beginning of the year divided by the earnings for the year. Calculate the average predictive P/E. (3 marks)

(ii) Suppose that we expect the earnings per share for 2022 is 60 pence. What is the expected share price based on the average predictive P/E? (2 marks)