Question
In: Finance
Consider the following information on the stock market. Company Shares Outstanding Price, beginning of year Price,...
Consider the following information on the stock market.
|
Company |
Shares Outstanding |
Price, beginning of year |
Price, end of year |
|
A |
200 |
$58 |
$94 |
|
B |
500 |
$20 |
$25 |
|
C |
1000 |
$70 |
$6 |
- Compute a price-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change?
- Compute a value-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change?
Solutions
Expert Solution
a) Price Weighted Stock price Index at the beginning of the year = 58+20+70 / 3 =49.33
Price Weighted Stock price Index at the end of the year = 94+25+6 / 3 =41.67
Percentage Change = (41.67 - 49.33) / 49.33
Percentage Change = -15.54%
b) Value Weighed index at the beginning of the year = 91600
Value Weighed index at the end of the year = 37300
Percentage change = (37300-91600)/91600
Percentage change =-59.28%
| Company | Shares Outstanding | Price beginning of year | Value Weighed (Shares *Price) | Price end of year |
Value Weighted (Shares *Price) |
| A | 200 | $ 58.00 | $ 11,600.00 | $ 94.00 | $ 18,800.00 |
| B | 500 | $ 20.00 | $ 10,000.00 | $ 25.00 | $ 12,500.00 |
| C | 1000 | $ 70.00 | $ 70,000.00 | $ 6.00 | $ 6,000.00 |
| $ 49.33 | $ 91,600.00 | $ 41.67 | $ 37,300.00 | ||
| Percentage Change | -15.54% | -59.28% |
jeff jeffy answered 2 years agoRelated Solutions
Consider the following information on the stock market. Company Shares Outstanding Price, beginning of year Price,...
Consider the following information on
the stock market.
Company
Shares Outstanding
Price, beginning
of year
Price, end
of year
A
200
$58
$94
B
500
$20
$25
C
1000
$70
$6
Compute a price-weighted stock price index for the beginning of
the year and the end of the year. What is the percentage
change?
Compute a value-weighted stock price index for the beginning of
the year and the end of the year. What is the percentage
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800
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X
25
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