Taylor, Inc., stock has a beta of 1.2 and an expected return of 9.3 percent. The risk-free rate is 4.1 percent and the market risk premium is 6.8 percent. This stock is _____ because the CAPM return for the stock is _____ percent.

Select one:

a. overvalued; 11.87

b. undervalued; 12.09

c. undervalued; 12.26

d. overvalued; 12.26

e. undervalued; 11.87