- 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 1 (15.03 KiB) Viewed 20 times
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
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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
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 $45. The stock will pay a dividend at year-end of $4.40. Assume that risk-free Treasury securities currently offer an interest rate of 2.0%. The historical average risk premium for the S&P 500 index is 7.8% per annum. What should be the price of the stock Sally should be willing to pay today? Round the answer to two decimal places and report it without the $ symbol.