Question
In: Finance
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 the base period. Do not round intermediate calculations. Round your answers to two decimal places.
PWIYear 1:
PWIYear 2:
VWIYear 1:
VWIYear 2:
-
Compute the percentage change in the value of each index during the year. Do not round intermediate calculations. Round your answers to two decimal places.
Percentage change in PWI: %
Percentage change in VWI: %
-
Compute the percentage change for an unweighted index assuming $1,000 is invested in each stock. Do not round intermediate calculations. Round your answer to two decimal places.
%
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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...
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?
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?
Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year...
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 $22 108,000,000 $33
108,000,000 Stock M 86 2,200,000 46 4,400,000a Stock R 37
21,000,000 42 21,000,000 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 the base period. Do not round intermediate calculations.
Round...
Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year...
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 $22 100,000,000 $30
100,000,000 Stock M 84 2,400,000 46 4,800,000a Stock R 39
24,000,000 42 24,000,000 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 the base period. Do not round intermediate calculations.
Round...
Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year...
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
$22
108,000,000
$33
108,000,000
Stock M
74
2,100,000
43
4,200,000a
Stock R
40
20,000,000
43
20,000,000
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 the base period. Do not round intermediate
calculations. Round...
Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year...
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
$23
110,000,000
$34
110,000,000
Stock M
82
2,100,000
50
4,200,000a
Stock R
36
29,000,000
38
29,000,000
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 the base period. Do not round intermediate
calculations. Round...
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.
Suppose there are only 3 stocks in an index with the following information: Stock Shares Outstanding...
Suppose there are only 3 stocks in an index with the following
information:
Stock
Shares Outstanding
Beginning Share Price
Ending Share Price
A
4,000
$22
$15
B
1,000
$47
$60
C
3,000
$32
$37
a) Calculate the value-weighted return on the index.
b) Calculate the price-weighted return on the index.
c) Suppose Company B announces a 4:1 stock split prior to the
end of the year, what is the new price-weighted return without
adjustment of the index divisor? (1 mark)...
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