An analyst just received the following information for Mythical Interactions, Inc. A senior equity trader in her group wants to know if he should purchase a large block of the stock. Earnings retention rate at 65% Required rate of return, ken, of 11% Return on equity (ROE) of 13%, expected to remain constant Estimated Sales per share of $175 Estimated EBIDTA profit margin of 22% Estimated Depreciation per share of $ 20 Estimated Interest Expense per share of $12 Corporate Tax Rate of 40% Current market price is $ 45.50 per share Based on the assumptions above, which of the following recommendations is CORRECT The analyst should advise the trader to:（）
A. not purchase the stock. It is overvalued by approximately $10.20.
B. not purchase the stock. It is overvalued by approximately $8.00.
C. purchase the stock. It is undervalued by approximately $8.00.
