Value and Price You plan on holding a stock for two years. The annual dividend per share is $0.22 and you believe you will be able to sell the stock in two years for $30.00. You believe this stock should pay a 7% rate of return per year. If the stock is currently priced at $26.00 the stock is __________________.

undervalued by more than 5%

overvalued by less than 5%

overvalued by more than 5%

undervalued by less than 5%