The current market price of a share of common stock is $67.50. The cash dividend paid now is $5 [ D₀ ]. The dividends are expected to grow at a constant rate of 8% per year for ever. The required rate of return on the common stock is 16%. Then the following is true according to the constant dividend growth model:

a. the stock is underpriced b. the stock is overpriced c. the stock is correctly priced