Under and overvalued stock

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Reference no: EM131354081

Under-/Overvalued Stock (LG10-3) A manager believes his firm will earn a 20.30 percent return next year. His firm has a beta of 1.36, the expected return on the market is 15.90 percent, and the risk-free rate is 5.90 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: EM131354081

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