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...
50.1K
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Finance
Consider the following stock price and shares outstandinginformation.
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 theyear.
Compute the beginning and ending values for a price-weightedindex and a market-value-weighted index. Assume a base value of 100and Year 1 as the base period. Do not round intermediatecalculations. Round your answers to two decimal places.
          PWIYear1:
          PWIYear2:
          VWIYear1:
          VWIYear2:
Compute the percentage change in the value of each index duringthe year. Do not round intermediate calculations. Round youranswers to two decimal places.
Percentage change in PWI:Â Â Â %
Percentage change in VWI:Â Â Â %
Compute the percentage change for an unweighted index assuming$1,000 is invested in each stock. Do not round intermediatecalculations. Round your answer to two decimal places.
  %
Answer & Explanation
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3.8 Ratings (639 Votes)
QUESTION a The Price Weighted Index for Year 1 is PWI1 2382363 47 Because Stock M has a stock split now at the end of year 1 stock of 82 would become stock of 41 the divisor must change appropriately so that PWI1 remains
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