Suppose XYZ were to do a share split of two to one and the share price falls to K50. (1) Calculate the new divisor that would leave the index unchanged. Explain why this is done. What is a share split, and why is this done? Discuss Suppose XYZ’s final price increases to K110, while ABC price, calculate the percentage change in the price weighted index of the two stocks. Compare that to the percentage return of a portfolio that holds one share in each company (4)      Assume that it

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.