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A manager believes his firm will earn a 14 percent return next year. His firm has a beta of 1.5, the expected return on the

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A manager believes his firm will earn a 14 percent return next year. His firm has a beta of 1.5, the expected return on the market is 12 percent, and the risk-free rate is 4 percent. Compute the return the firm should earn given its level of risk. Determine whether the manager is saying the firm is undervalued or overvalued. Undervalued Overvalued

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