A manager believes his firm will earn a 1298 percent return, Financial Management

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A manager believes his firm will earn a 1298 percent return

Under-/Overvalued Stock-A manager believes his firm will earn a 12.98 percent return next year. His firm has a beta of 1.38, the expected return on the market is 11.10 percent, and the risk-free rate is 5.10 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. Undervalued Overvalued

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Financial Management: A manager believes his firm will earn a 1298 percent return

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Financial Management: A manager believes his firm will earn a 1298 percent return

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