Stock Ms beta coefficient is b M = 0.9. The risk-free rate is 5 percent, and the expected return on an average stock is 12 percent. The current price of Stock M, P 0, is $50; the next expected dividend, D 1, is $1.75; and the stocks expected constant growth rate is 3.5 percent. Which of the following is correct?

	a.	Stock M is undervalued. Its price will rise to restore equilibrium.
	b.	Stock M is fairly priced and in equilibrium.
	c.	Stock M is overvalued. Its price will fall to restore equilibrium.
	d.	Stock M is overvalued. Its price will rise to restore equilibrium.
	e.	Stock M is undervalued. Its price will fall to restore equilibrium.