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.

What is the required return for JJM?

Given the required return, what is the value of the stock?

If the stock is selling for $100, what should you do? If the beta coefficient declines to 1.0, what is the new value of the stock? If the price remains $100, what course of action should you take given the valuation in d?