Let us assume that the long-term annual market return is expected to be 9%. If the long-term annual expected growth is 5%, while the pessimistic investors believe that the long-term annual growth rate is only 4%, the stock market will be ______. (HINT: We used the constant growth formula for a similar question in the investor sentiment topic in the chapter on efficient markets)

Group of answer choices

A. Overvalued by 1%

B. Overvalued by 20%

C. Undervalued by 1%

D. Undervalued by 20%