Given the required return calculated in part a what is the


Jersey Jewel Mining has a beta coefficient of 1.2. Currently the risk-free rate is 2 percent and the anticiapted 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 calculated in part (a), what is the value of the stock using the Gordon model?

c. If the stock is selling for $100, what should you do based on the valuation calculated in part (b)?

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Financial Management: Given the required return calculated in part a what is the
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