Jersey Jewel Mining has a beta coefficient of 1.2. Currently the risk-free rate is 4 percent and the anticipated return on the market is 7 percent. JJM pays a $4.70 dividend that is growing at 4 percent annually. Do not round intermediate calculations.

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

%

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

$

If the stock is selling for $152, what should you do?

The stock

-Select-

overvalued and

-Select-

be purchased.

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

$

If the price remains $152, what course of action should you take given the valuation in d?

The stock is

-Select-

and

-Select-

be purchased.

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