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 $57. The stock will pay a dividend at year-end of $2.00. Assume that risk-free Treasury securities currently offer an interest rate of 1.8%. Average rates of return on Treasury bills, government bonds, and common stocks, 19002017 (figures in percent per year) are as follows. Average Premium (Extra return versus Treasury bills) (%) Portfolio Treasury bills Treasury bonds Common stocks Average Annual Rate of Return (%) 3.8 5.3 11.5 1.5 7.7 a. What is the discount rate on the stock? (Enter your answer as a percent rounded to 2 decimal places.) Discount rate %