NBAs most recent dividend was RM2.50 per share and is selling today in the market for RM65. The dividend is expected to grow at a rate of 6 percent per year for the foreseeable future. If the return on investments with comparable risk is 10 percent, should you purchase the stock?

Select one:

a. No, because the stock is overpriced RM1.25.

b. Yes, because the stock is underpriced RM2.50.

c. No, because the stock is overpriced RM2.50.

d. Yes, because the stock is underpriced RM1.25.