There are two stocks, A and B, which make up a particular price-weighted index. Below are...

There are two stocks, A and B, which make up a particular price-weighted index. Below are the closing prices and number of shares outstanding for each stock for yesterday and today. Stock B split 3-for-1 today before the market opened. What is the value of the index after the close today if the index contains stocks A and B and closed yesterday at 115.00 (before stock B split 3-for-1)?

Yesterday Today

Closing price of stock A $150 $162

Shares outstanding for stock A 100 100

Closing price of stock B $80 $25

Shares outstanding for stock B 60 180

Index value 115.00 ?

Expert Solution

jeff jeffy answered 2 years ago

Assume the following information concerning two stocks that make up an index. What is the value-weighted...

Assume the following information concerning two stocks that make up an index. What is the value-weighted return for the index? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Price per Share Shares Outstanding Beginning of Year End of Year Kirk, Inc. 41,000 $ 75 $ 83 Picard Co. 35,500 116 121

You construct a price-weighted index of 55 stocks. At the beginning of the day, the index...

You construct a price-weighted index of 55 stocks. At the beginning of the day, the index is 8,710.44. During the day, 54 stock prices remain the same, and 1 stock price increases $5.40. At the end of the day, your index value is 8,757.89. What is the divisor on your index?

You are given the following information concerning two stocks that make up an index.

- Problem 5-7 Index Level (LO4, CFA2)You are given the following information concerning two stocks that make up an index. Assume the value-weighted index level was 211.98 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Price per ShareShares OutstandingBeginning of YearEnd of YearKirk, Inc.34,000$54$61Picard Co.32,5007985Index Level = ______- Problem 5-14 Price-Weighted Indexes (LO4, CFA2)The following three defense stocks are to...

What is the return of a market capitalization weighted and evenly weighted index of two stocks...

What is the return of a market capitalization weighted and evenly weighted index of two stocks with market prices of $30 and $50 that increase to $40 and $60 where the market capitalizations of each is $4 billion and $6 billion respectively at the beginning of the period? Please show work.

You are given the following information concerning two stocks that make up an index. Assume the...

You are given the following information concerning two stocks that make up an index. Assume the value-weighted index level was 280.98 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price per Share Shares Outstanding Beginning of Year End of Year Kirk, Inc. 40,000 $ 64 $ 70 Picard Co. 35,500 114 122 Index level

1) Assume the following information concerning two stocks that make up an index. What is the...

1) Assume the following information concerning two stocks that make up an index. What is the value-weighted return for the index? Price per Share Shares Outstanding Beginning of Year End of Year Kirk, Inc. 37,000 $ 53 $ 57 Picard Co. 27,000 79 84 Round intermediate steps and your final answer to four decimals. Enter your answer in decimal format ( EX: XXXX). 2) You want to sell 600 shares of DEF stock at the going market price after the...

1. Assume the following information concerning two stocks that make up an index. What is the...

1. Assume the following information concerning two stocks that make up an index. What is the value-weighted return for the index? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Price per Share Shares Outstanding Beginning of Year End of Year Kirk, Inc. 42,000 $ 54 $ 61 Picard Co. 29,500 79 85 RETURN %: 2. You are given the following information concerning two stocks that make up an index. Assume that you...

A price-weighted index is comprised of three stocks. Yesterday the three stocks were priced at $15,...

A price-weighted index is comprised of three stocks. Yesterday the three stocks were priced at $15, $20, and $32. The number of outstanding shares for each is 500 shares, 2,000 shares, and 1,000 shares, respectively. If the stock prices changed to $16, $15, and $38 today respectively, what is the 1-day rate of return on the index? ① 2.7% ② 3.0% ③ 3.3% ④ 3.6%

A price weighted index is composed of two stocks. After experiencing a 3:1 split, stock one...

A price weighted index is composed of two stocks. After experiencing a 3:1 split, stock one is priced at $22.25. Stock two is priced at $208.25. The original divisor of the index is 2.0. Compute the new divisor.

Assume that you construct a price weighted index of 30 stocks. The sum of the prices...

Assume that you construct a price weighted index of 30 stocks. The sum of the prices of these stocks is $2000. The divisor for this index is 30, and the value of this index is 100. Now assume that one of the 30 stocks, with an average price of $100, has a three-for-one stock split while the value of other stocks remains unchanged. a) If you make no adjustments to the index, what will be the new value of the...

Question