A manager believes his firm will earn a 16.00 percent return next year. His firm has a beta of 1.23, 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.) What is the Required return? Determine whether the manager is saying the firm is undervalued or overvalued. Overvalued Undervalued