Assume that the 10-year U.S. Treasury is yielding 4.5 percent. Next year's earnings for the S&P 500 are expected to be $130. Use the Fed model to estimate the value of the S&P 500. Do not round intermediate calculations. Round your answer to two decimal places.

If the S&P 500 is trading at 2,700, is the market overvalued or undervalued, and by how much? Do not round intermediate calculations. Round your answer to two decimal places.

The market is -Select-overvaluedundervaluedItem 2 by %.