Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the SEP 500 will sell at year-end at a price of $56. The stock will pay a dividend at year-end of $4.00. Assume that risk-free Treasury securities currently offer an interest rate of 1.9%. Average rates of return on Treasury bills. government bonds. and common stocks, 19002017 (gures in percent per year) are as follows. Average Premium (Extra return Average Annual versus Treasury Portfolio Rate of Return (15) bills) ('4) Treasury bills 3.3 Treasury hands 53 1.5 Common stocks 11.5 7.7 a. What is the discount rate on the stock? (Enter your answer as a percent rounded to 2 decimal places.) o............ _m b. What price should she be Willing to pay for the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal p1aces.)