Jersey Jewel Mining has a beta coefficient of 1. Currently the risk-free rate is 4 percent and the anticipated return on the market is 6 percent. JJM pays a $4.60 dividend that is growing at 4 percent annually. Do not round intermediate calculations.

1. What is the required return for JJM? Round your answer to two decimal places.

%

2. Given the required return, what is the value of the stock? Round your answer to the nearest cent.

$

3. If the stock is selling for $254, what should you do?

The stock -Select-isis notItem 3 overvalued and -Select-shouldshould notItem 4 be purchased.

4. If the beta coefficient declines to 0.9, what is the new value of the stock? Round your answer to the nearest cent.

$

5. If the price remains $254, what course of action should you take given the valuation in d?

The stock is -Select-overvaluedundervaluedItem 6 and -Select-shouldshould notItem 7 be purchased.