Problem $9-13$

Assume that the $10-$year U$.$S$.$ Treasury is yielding $5\mathrm{.}0$ 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 $2,350,$ 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

by

$\%.$