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5. Jersey Jewel Mining has a beta coefficient of 1.2. Currently the risk-free rate is 2 percent and the anticipated return on the market is
5. Jersey Jewel Mining has a beta coefficient of 1.2. Currently the risk-free rate is 2 percent and the anticipated return on the market is 8 percent. JJM pays a $4.50 dividend that is growing at 4 percent annually a. What is the required return for JJM b. Given the required return, what is the value of the stock? c. If the stock is selling for $100, what should you do? d. If the beta coefficient declines to 1.0, what is the new value of the stock? e. If the price remains $100, what course of action should you take given the valuation in d? The riclofrre rate ef return is 3 percent, and the expected return on the
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