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Savec Problem 10-19 Under/Overvalued Stock (LG10-3) A manager believes his firm will earn a 14 percent return next year. His firm has a beta of

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Savec Problem 10-19 Under/Overvalued Stock (LG10-3) A manager believes his firm will earn a 14 percent return next year. His firm has a beta of 15, 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 O undervalued

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