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The finance department of company X examines the value of the company's common shares. The last dividend distributed ( D ) was $ 6 per

The finance department of company X examines the value of the company's common shares. The last dividend distributed (D) was $6 per share. The shareholders' expected return is R =15%. Assume that the economic value of the stock is $40 and that the stock price on the stock market today is $60. Do you think that the current cost of equity (calculated on the basis of the return that justifies the current share price levels) is in the company's interest and justifies the issuance of new shares? Show your calculations.

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