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The shareholders equity is extremely low for Raphael Bank because the previous CEO would like to pursue a high ratio of return on equity. However,

The shareholders equity is extremely low for Raphael Bank because the previous CEO would like to pursue a high ratio of return on equity. However, this approach may lead to serious consequences. Now there is a new CEO and you are his advisor. Explain to him what the functions of the shareholder equity are and why it is necessary to increase shareholders equity. (6 Marks)

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