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Jumanji Corp. has 120,000 preferred shares which currently sell for $91 each and pay an annual dividend of $6.80. They also have 220,000 common shares which sell for $55.25 per share and they just paid an annual dividend of $2.30 per share. The common share dividends are expected to grow by 4.10% each year in perpetuity. Jumanji has 11,000 bonds with a face value of $1,000 each. The bonds pay 6.10% annual coupon and will mature in 30 years and currently sell at 102% of face value. The company's tax rate is 36%. What is the required rate of return on the common shares? A) 9.68% B) 9.47% C) 8.43% D) 9.12% E) 8.56%
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