Consider a company, which sales are expected to grow 10% annually for two years and 5% annually thereafter. Suppose that the required rate of return for equity is 11%. The current Free Cash Flow to Equity (FCFE) per share is 4 euros.

a) Estimate the value of this companys stock by applying two-stage FCFE valuation approach.

b) Suppose that the current market price of the stock is 70 euros? Is the stock undervalued, overvalued or fairly priced in the market? Explain in one sentence, how do you reach to the conclusion.