KDP's most recent dividend was $2.00 per share and is selling today in the market for $70. The dividend is expected to grow at a rate of 7% per year for the foreseeable future. If the market return is 10% on investments with comparable risk, should you purchase the stock? (Answer is c, but I don't understand why?)

a) No, because the stock is overpriced $1.33.

b) No, because the stock is overpriced $3.33.

c) Yes, because the stock is underpriced $1.33.

d) Yes, because the stock is underpriced $3.33