The S&P500 is trading at 4,200, and the expected dividend over the next year is $63.00. You expect the economy to grow by 3% annually, and the annual inflation rate will be 5% over the long term. The yield to maturity on 10-year US Treasuries is 6.0% What is the long-term expected return on the S&P500?
The S&P500 is trading at 4,200, and the expected dividend over the next year is $63.00. You expect the economy to grow by 3% annually, and the annual inflation rate will be 5% over the long term. The yield to maturity on 10-year US Treasuries is 6.0% What is the long-term expected return on the S&P500?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The S&P500 is trading at 4,200, and the expected dividend over the next year is $63.00. You expect the economy to grow by 3% annually, and the annual inflation rate will be 5% over the long term. The yield to maturity on 10-year US Treasuries is 6.0% What is the long-term expected return on the S&P500? 3.500% 9.500% 1.500% 7.500%.
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