Practice Question 14 A firm's class A common shares are currently trading for $13.70 on the Toronto Stock Exchange. The risk free rate prevailing in the market is currently 5%, the expected return on the market portfolio is 11%. The firm has a beta of 1.6 and is expected to pay a dividend of $2 forever. Under these conditions, the firm's common shares are currently: overvalued. undervalued. fairly valued. strongly valued