Taylor, Inc., stock has a beta of 1.4 and an expected return of 13.3 percent. The risk-free rate is 3.3 percent and the expected market portfolio return is 11.2%. What is the required return on this stock? And is it overvalued or undervalued?

A.

10.36% and undervalued

B.

10.36% and overvalued

C.

13.3% and exactly valued

D.

14.36% and undervalued

E.

14.36% and overvalued