Jersey Jewel Mining has a beta coefficient of 1.4. Currently the risk-free rate is 2 percent and the anticipated return on the market is 6 percent. JJM pays a $4.80 dividend that is growing at 2 percent annually. Do not round intermediate calculations.

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

_____%

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

$ ____

c. If the stock is selling for $106, what should you do?

The stock ____(is or is not) overvalued and ______(should or should not) be purchased.

d. If the beta coefficient declines to 1.1, what is the new value of the stock? Round your answer to the nearest cent.

$____

e. If the price remains $106, what course of action should you take given the valuation in d?

The stock is ______(overvalued or undervalued) and ______(should or should not) be purchased.