Question

In: Finance

The following chart provides price (P) and number of shares outstanding (Q) data for stocks A,...

The following chart provides price (P) and number of shares outstanding (Q) data for stocks A, B, and C at the end of year 0 and at the end of year1.

P0 Q0 P1 Q1

A 45 100 50 100

B 60 150 50 150

C 28 200 35 200

What are the equal-, price-, and value-weighted returns on an index comprised of A, B and C?

Equal weighted return Price weighted return Value weighted return A. 2.09% B. 1.5% C. 6.48%

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

EQUAL WEIGHTED INDEX : C : 6.48%

PRICE WEIGHTED INDEX : B : 1.5%

VALUE WEIGHTED INDEX : A : 2.09%

jeff jeffy answered 3 months ago
Next > < Previous

Related Solutions

The following chart provides price (P) and number of shares outstanding (Q) data for stocks A,...
The following chart provides price (P) and number of shares outstanding (Q) data for stocks A, B, and C at the end of year 0 and at the end of year1. P0 Q0 P1 Q1 A 45 100 50 100 B 60 150 50 150 C 28 200 35 200 What are the equal-, price-, and value-weighted returns on an index comprised of A, B and C? Equal weighted return Price weighted return Value weighted return A. 1.5% B. 2.09%...
2. Consider the following data for three stocks. Stock         Initial Price    Final Price       Number of Outstanding...
2. Consider the following data for three stocks. Stock         Initial Price    Final Price       Number of Outstanding Shares Stock 1      $10                 $12                   20 million Stock 2      $25                 $24                   5 million Stock 3      $100               $106                 1 million Compute the rate of return for each of the following portfolios: (a) Price weighted (b) Value weighted (c) Equal weighted
24. Consider the following three stocks: stock price number of shares outstanding Stock A $40 200...
24. Consider the following three stocks: stock price number of shares outstanding Stock A $40 200 Stock A $70 500 Stock A $10 600 Assume at these prices that the value-weighted index constructed with the three stocks is 490. What would the index be if stock B is split 2 for 1 and stock C 4 for 1? A) 355 B) 430 C) 1000 D) 490 E) 265 34. A 5.5% 20-year municipal bond is currently priced to yield 7.2%....
Consider the three stocks in the following table. Stock Initial Price Final Price Shares Outstanding (millions)...
Consider the three stocks in the following table. Stock Initial Price Final Price Shares Outstanding (millions) A $80 $100 100 B $50 $30 300 C $120 $125 100 1. Calculate the rate of return on an equally weighted index of the three stocks. 2. Calculate the rate of return on a price-weighted index of the three stocks. 3. Calculate the rate of return on a market-weighted index of the three stocks.
Which of the following reduces the number of outstanding shares and increases the share price proportionately?...
Which of the following reduces the number of outstanding shares and increases the share price proportionately? a. A DRIP. b. A reverse stock split. c. A stock dividend. d. A stock spin-off.
Consider the three stocks in the following table. P(t) represents price at time t, and Q...
Consider the three stocks in the following table. P(t) represents price at time t, and Q (t) represents share outstanding at time t. Stock C splits two for one in the last period. P(0) Q(0) P(1) Q(1) P(2) Q(2) A 90 100 95 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 First, calculate the price weighted indexes at t=0 and t=1. Based on the two numbers calculate the rate of return....
Consider the following stock price and shares outstanding information. Consider the following stock price and shares...
Consider the following stock price and shares outstanding information. Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year 2 Price Shares Outstanding Price Shares Outstanding Stock K $19 100,000,000 $28 100,000,000 Stock M 76 2,400,000 40 4,800,000a Stock R 44 25,000,000 49 25,000,000 aStock split two-for-one during the year. Compute the beginning and ending values for a price-weighted index and a market-value-weighted index. Assume a base value of 100 and Year 1 as...
Consider the following stock information (price and number of shares outstanding): Stock G Stock A Stock...
Consider the following stock information (price and number of shares outstanding): Stock G Stock A Stock Q P0 $70 $85 $105 Q0 200 500 300 P1 $84 $81 $110 Q1 200 500 300 P2 $20 $85 $24 Q2 800 500 1500 1. Based on the information given, for a price-weighted index of the three stocks calculate: 1.1. the rate of return for the first period (t=0 to t=1). Interpret your answer. 1.2. the value of the divisor in the second...
Q) Suppose a firm has 40.80 million shares of common stock outstanding at a price of...
Q) Suppose a firm has 40.80 million shares of common stock outstanding at a price of $45.56 per share.  The firm also has 151000.00 bonds outstanding with a current price of $1,106.00. The outstanding bonds have yield to maturity 7.18%. The firm's common stock beta is 2.267 and the corporate tax rate is 36.00%. The expected market return is 12.79% and the T-bill rate is 3.05%. Compute the following:      a) Weight of Equity of the firm     b) Weight of Debt...
Q) Suppose a firm has 16.70 million shares of common stock outstanding at a price of...
Q) Suppose a firm has 16.70 million shares of common stock outstanding at a price of $16.68 per share. The firm also has 167000.00 bonds outstanding with a current price of $1,016.00. The outstanding bonds have yield to maturity 7.19%. The firm's common stock beta is 1.97 and the corporate tax rate is 38.00%. The expected market return is 11.54% and the T-bill rate is 2.96%. Compute the following:     -Weight of Equity of the firm     -Weight of Debt...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT