Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year 2 Shares Shares Price Outstanding Price Outstanding Stock K $19 108,000,000 $30 108,000,000 Stock M 76 Stock R 42 *Stock split two-for-one during the year. 4,000,000 2,000,000 47 21,000,000 46 21,000,000 a. 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. PWI 1: PWI 2: VWIyear 1: VWIvar 2: b. 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: c. 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. % %

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Consider the following stock price and shares outstanding information.
DECEMBER 31, Year 1
Shares
DECEMBER 31, Year 2
Shares
Price Outstanding Price Outstanding
Stock K
$19
108,000,000 $30 108,000,000
Stock M
76
2,000,000 47
Stock R
42
21,000,000 46
aStock split two-for-one during the year.
4,000,000a
21,000,000
a. 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:
b. 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:
c. 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.
%
%
%
Transcribed Image Text:Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 Shares DECEMBER 31, Year 2 Shares Price Outstanding Price Outstanding Stock K $19 108,000,000 $30 108,000,000 Stock M 76 2,000,000 47 Stock R 42 21,000,000 46 aStock split two-for-one during the year. 4,000,000a 21,000,000 a. 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: b. 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: c. 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. % % %
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