8.A manager believes his firm will earn a 17.00 percent return next year. His firm has a beta of 1.37, the expected return on the market is 14.00 percent, and the risk-free rate is 6.00 percent.

Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)

Required return ____%

Determine whether the manager is saying the firm is undervalued or overvalued.

Undervalued

Overvalued