Good Evening!

Can you explain how to solve for this question?

Shake Shack, Inc. (SHAK) just paid a dividend of $2.48 and expected to pay a dividend of $2.65 next year. Dividends are expected to grow at the current growth rate in perpetuity. The risk-free rate of return is 3.5%, and the expected return on the market portfolio is 12.5%. The stock's current price is $60. What is the implied required return for stocks of SHAK?

1) 10.74%

2) 11.27%

3) 10.98%

4) 7.92%