A company's per-share dividends on common stock are expected to grow at a constant rate of 5.00% for the foreseeable future. The company has just paid out a per-share dividend of $2.90. Investors require a return of 12% on this stock. Each share of this stock is currently selling for $45. Based on this information, we can say that this stock is

overpriced because the expected rate of return on this stock is 15.52%

overpriced because the expected rate of return on this stock is 11.77%

underpriced because the expected rate of return on this stock is 11.77%

underpriced because the expected rate of return on this stock is 15.52%

correctly priced because the expected rate of return on this stock is 15.52%