Use the information which is provided by the following table to answer question:

Real interest rate

Expected inflation

Beta

Required return on the market

Growth rate in EPS & Dividends

EPS

Average industry P/E

Pay-out ratio

2.0%

3.0%

1.20

12.0%

6.0%

$2.0

12

30.0%

The required return on the stock is:-

Select one:

a. 13.40%

b. 12.0%

c. 11.7%

d. 7.80%