Jersey Jewel Mining has a beta coefficient of 1 2 Currently the risk free rate is 5 percent and the anticipated return on the market is 11 percent JJM pays a $4 50 dividend that is growing at 6 percent annually a What is the required return for JJM b Given the required return, what is the value of ...

Problems 58 add the analysis of risk ie beta to the ...

Jersey Jewel Mining has a beta coefficient of 1.2. Currently the risk-free rate is 5 percent and

Question:

Jersey Jewel Mining has a of 1.2. Currently the risk-free rate is 5 percent and the anticipated return on the market is 11 percent.
JJM pays a $4.50 that is growing at 6 percent annually.
a. What is the required return for JJM?
b. Given the required return, what is the value of the stock?
c. If the stock is selling for $80, what should you do?
d. If the declines to 1.0, what is the new value of the stock?
e. If the price remains $80, what course of action should you take given the valuation in d?
Beta Coefficient
Beta coefficient is a measure of sensitivity of a company's stock price to movement in the broad market index. It is an indicator of a stock's systematic risk which is the undiversifiable risk inherent in the whole financial system. Beta coefficient... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...