Under/Over Valued stock A manager believes his firm will earn a 12.25 percent return next year. His firm has a beta of 1.45, the expected return on the market is 9.5 percent, and the risk-free rate is 4.5 percent. Compute the return the firm should earn given its level of risk and determine whether the manager is saying the firm is under-valued or over-valued. 18.275%, over-valued 11.75%, under-valued 18.275%, under-valued 11.75%, over-valued