Aaron Mechanic, CFA is responsible for valuing the shares of Duotronics Research Laboratories

$($DRL$).$ The stock is currently trading at $$8\mathrm{.}75$ and he gathers the following financial information about the company:

$$ Expect ROE $16\%$ annually for each of the next $4$ years

$$ Current BV of equity $$435,000,000$

$$ Shares outstanding $60$ million

$$ Required return on equity $12\%$

$$ No dividends paid

$$ All earnings are reinvested

$$ EPS is equal to the beginning book value time ROE

$$ Residual income is expected to decline over time $($persistence $=0\mathrm{.}4)$

Based on the Residual Income Model, what recommendation would Mechanic issue for the stock of DRL