A manager believes his firm will earn a return of 19.80 percent next year. His firm has a beta of 1.88, the expected return on the market is 17.40 percent, and the risk-free rate is 7.40 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. overvalued undervalued