A manager believes his firm will earn a return of $12\mathrm{.}30$ percent next year. His firm has a beta of $1\mathrm{.}85,$ the expected return on the market is $8\mathrm{.}80$ percent, and the risk$-$free rate is $3\mathrm{.}80$ percent.

Compute the return the firm should earn given its level of risk.