Manager is saying firm is undervalued or overvalued

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Reference no: EM131881086

A manager believes his firm will earn a 23.80 percent return next year. His firm has a beta of 1.69, the expected return on the market is 16.30 percent, and the risk-free rate is 6.30 percent.

Compute the return the firm should earn given its level of risk.

Required return %

Determine whether the manager is saying the firm is undervalued or overvalued.

Overvalued

Undervalued

Reference no: EM131881086

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