Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. top hedge fund manager sally buffit believes that

Top hedge fund manager Sally Buffit believes that a stock with the same market risk...

90.2K

Verified Solution

Question

Finance

image

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 547. The stock will pay a dividend at year-end of $2.00. Assume that risk-free Treasury securities currently offer an interest rate of 2.3%. 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) (%) Average Annual Rate of Return (%) 3.8 Portfolio Treasury bills Treasury bonds Common stocks 5.3 1.5 11.5 7.7 . What is the discount rate on the stock? (Enter your answer as a percent rounded to 2 decimal places.) Discount rate . What price should she be willing to pay for the stock today? (Do not round intermediate calculations. Round your answer to 2 slecimal places.) Stock price

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

How is the premium of an interest rate cap calculated?

Finance
Q

Solve the following initial value problem. y(4) ? 5y??? + 4y?? ?=? x,    y(0) ?=? 0, y?(0) ?=? 0, y??(0)...

Basic Math
Q

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door...

Accounting
Q

Now try a different way of solving a dihybrid cross. Because of Mendel's (second) law...

Biology
Q

This evolutionary concept suggests that non humans acting symbiotically within a given ecology are critical...

Biology
Q

What is the term "sticky ends", produced by restriction enzymes, referring to? Why is this...

Biology
Q

Listen In a tissue that is subject to a great deal of mechanical stress like...

Biology
Q

4 Provide both the equation and a sketch of the requested function Draw two full...

Basic Math
Q

f x

Calculus
Q

Except for the earnings per share statistics, the 2022,2023, and 2024 income...

Accounting
Q

Digital Forensics Accounting Based on the information presented in the chapter, evaluate the potential future...

Accounting
Q

In r. sedeno's transactions...how did you get $120 for the petty cash? could you further...

Accounting