A manager believes his firm will earn a return of 19.40 percent next year. His firm has a beta of 1.67, the expected return on the market is 11.20 percent, and the risk-free rate is 3.20 percent. Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)

In the fall of 2008, aig, the largest insurance company in the world at the time, was at risk of defaulting due to the severity of the global financial crisis. as a result, the u.s. government stepped in to support aig with large capital injections and an ownership stake. how would this affect, if at all, the yield and risk premium on aig corporate debt?