Jimmy Lubes common stock currently sells for $50. The firm will pay its first annual dividend of $2.30 four years from now. After paying its first dividend the dividend growth rate will be 8% forever. The required rate of return is 12%. Should you purchase the stock?

Yes, because the stock is undervalued by $13.46.

Yes, because the stock is undervalued by $7.52.

No, because the stock is overvalued by $7.52.

No, because the stock is overvalued by $9.07.