You are an equity portfolio manager in an investment company, and have gathered the following information about stock ABC: Dividends per share in 2010 : RM2 Dividends per share in 2020 (last year) : RM3 Earnings per share in 2020 (last year) : RM5 Market risk premium : 6% Stocks beta : 1.2 Risk-free rate : 2% Required:

(i) Calculate the forward price-to-earnings (P/E) ratio if the company ABC has a constant dividend payout policy. (6 marks) (ii) Calculate the intrinsic value of stock ABC. (3 marks)