Haulin' It Towing Company Is Selling a Stock for $16

Haulin' It Towing Company is selling a stock for $16. The stock just paid a dividend of $0.60, and this dividend is expected to grow by 15% per year for three years. After that, it will grow at a constant rate of 4%. The stock's beta is 1.7, the risk-free rate of interest is 1.75%, and the market risk premium is 5.25%. Should you buy the stock? (Round to dollars and cents or two decimal points.)

A) No, the stock is not a good value since it is only worth about $8.
B) No, the stock is not a good value since it is only worth about $12.
C) Yes, the stock is a good value since it should sell for about $25.
D) Yes, the stock is a good value since it should sell for about $18.