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Determining the firm undervalued or overvalued

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A manager believes his firm will earn a 10.60% return next year. His firm has a beta of 1.34, the expected return on the market is 8.4%, and the risk-free rate is 3.4%. Computer return the firm should earn given its level of risk and determine whether the manager is saying the firm is undervalued or overvalued.

Reference no: EM132104871

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