A manager believes his firm will earn a 1150 percent return, Ask an Expert

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A manager believes his firm will earn a 11.50 percent return next year. His firm has a beta of 1.40, the expected return on the market is 9.0 percent, and the risk-free rate is 4.0 percent. Compute the return the firm should earn given its level of risk and determine whether the manager is saying the firm is undervalued or overvalued.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91619579

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