WK 5 Quiz (due Day 7 A Saved Help Sa 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 $60 The stock will pay a dividend at year-end of $2.00. Assume that risk-free Treasury securities currently offer an interest rate of 15% Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2017 (figures in percent per year) are as follows Average Premium (Extra return versus Treasury bills) (8) 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 b. What price should she be willing to pay for the stock today? (Do not round intermediate calculations. Round your answer to 2 1 of 17 !! Next > o 9 e to search