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Underestimated Inc.s common shares currently sell for $33 each. The firms management believes that its shares should really sell for $59 each. The firm just

Underestimated Inc.s common shares currently sell for $33 each. The firms management believes that its shares should really sell for $59 each. The firm just paid an annual dividend of $2 per share and management expects those dividends to increase by 6 percent per year forever (and this is common knowledge to the market). What does management believe is the correct cost of common equity for the firm?

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