This year PHOTO Bhd. announced a dividend of RM2.00 per share. Recently, an analyst firm reported that the company's annual dividends should grow at the rate of 7% per year for the next 4 years. However, the growth rate will decrease at a rate of 5% a year thereafter, due to the forecasted oil crisis affecting the industry. Given the risk free rate and the market return are 3% and 7% respectively. If the beta of the company is 2 times that of the market,

i. Calculate the required return

a. 10%

b. 11%

c. 12%

ii. Analyze what is the maximum price you would be willing to pay for this stock? (To the nearest decimal point)

a. RM17.49

b. RM7.47

c. RM71.30

d. RM49.40