Under/Over Valued Stock A manager believes his firm will earn a 16.9 percent return next year. His firm has a beta of 1.59, the expected return on the market is 14.9 percent, and the risk-free rate is 4.9 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. 20.8%, over-valued 24.691%, under-valued 24.691%, over-valued 20.8%, under-valued