Question: In late 2 0 1 9 , the S&P 5 0 0 was at 3 1 0 0 . The forecast for 1 2 -

In late 2019, the S&P 500 was at 3100. The forecast for 12-month forward earnings per share for the S&P 500 portfolio was about $150. The 10-year Treasury bond yield forecast for next year would be 2%. We posit that the spread between the carnings yield and the Treasury yield would be 2.75% for the next 12-month period. What would be the capital gain?

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