Use "regarded as" to rewrite "They think she is the best student in class".

The correct answer appropriately utilizes the phrase "regarded as" to convey the sentiment expressed in the original statement. The phrase indicates a form of acknowledgment or recognition held by a group regarding an individual’s status or qualities. In this case, saying "She is regarded as the best student in class" captures the meaning that others hold a specific opinion about her excellence in that setting.

The essence of the transformation lies in maintaining the original meaning while seamlessly integrating the target phrase. Here, "regarded as" serves to imply that the collective belief within the class is about her standing as the best student. The choice reflects a direct correlation to the original thought, ensuring clarity and cohesion in the transformation.

Other choices present variations of this meaning but do not use "regarded as" or do so in a different context, which alters the focus or intensity of the original statement.