McMillen House of Books recently paid a $3 dividend on its preferred stock. Investors require a 6%

Question:

McMillen House of Books recently paid a $3 on its preferred stock. Investors require a 6% return on the stock. The stock is currently selling for $45. Is the stock a good buy?
a. Yes, as it is undervalued $5.
b. Yes, as it is undervalued $10.
c. No, as it is overvalued $5.
d. No, as it is overvalued $10.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...