Could you please explain to me why I can't use Constant Growth Model to calculate value? Thanks!

Incorrect Q. A company's $100 par value perpetual preferred stock has a dividend rate of 7% and a required rate of return of 11%. The company's earnings are expected to grow at a constant rate of 3% per year. If the market price per share for the preferred stock is $75, the preferred stock is most appropriately described as being Correct answerYour answer A. overvalued by $11.36 B. undervalued by $15.13 C. undervalued by $36.36 Solution Time Spent: 2 min 37 sec A is correct. Difficulty Level: Unrated Value of perpetual preferred stock Dividend Required rate of return $63.64 0.11 The stock is overvalued by $75.00 63.64 $11.36 B is incorrect because it uses the constant growth model 0.11-003 $90.13