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Top hedge fund manager Sally Buffit believes that a stock with the same market risk as...

Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the S&P 500 will sell at year-end at a price of $48. The stock will pay a dividend at year-end of $4.00. Assume that risk-free Treasury securities currently offer an interest rate of 2.2%. Average rates of return on Treasury bills, government bonds, and common stocks, 1900–2015 (figures in percent per year) are as follows.

What is the discount rate on the stock? enter your answer in percent and round 2 decimals spaces

what price should she be willing to pay for the stock today? do not round immediate calculations. round your answers 2 decimals spaces

Treasury bills 3.8
Treasury bonds 5.3 1.5
Common stocks 11.4 7.6
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