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A manager believes his form will eam a 16 percent return next year. His firm has a beta of 15 The expected return on the

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A manager believes his form will eam a 16 percent return next year. His firm has a beta of 15 The expected return on the market is 14 percent and the risk-free rate is 4 percent Compute the return the firm should earn given its level of risk and determine whether the manager is saying the frm is undervalued or overvalued relative to their own estimate

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