Shares in PQR are currently trading for $12.25. The company is not expected to pay a dividend for the next four years. At the end of year 5, it is expected to pay a dividend of $1.00 per share, which will grow at 2% p.a. in perpetuity. What is the shareholder's required rate of return?

Group of answer choices

8% p.a.

7.5% p.a.

7% p.a.

6.5% p.a.

None of the other answers is correct