Assuming instead that, firm D declares a share dividend after the market closes at time 0 The share dividend takes the form of 10 for 10 (if you have 10 shares at time 0, you are entitled another 10 shares Hint the share dividend does not change the market value of the firm) The information is shown in the following table Table 1 3 Component stocks of Index X (c 1) Fill in the blanks (c 2) What are the price weighted, value weighted, and equally weighted indices at time 1 What are the index returns in these cases Stocks PO MVO Rtn1 MV1 Share dividend A 10 100 10 No B 20 400 10 No 30 300 4 No D 60 1 200 6 10 for 10 Stocks PO MVO Rtn1 MV1 Share dividend A 10 100 10 No B 20 400 10 No 30 300 4 No D 60 1 200 6 10 for 10

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Question: Assuming instead that, firm D declares a share dividend after the market closes at time 0. The share dividend takes the form of 10 for

Assuming instead that, firm D declares a share dividend after the market closes at time 0. The share dividend takes the form of 10 for 10 (if you have 10 shares at time 0, you are entitled another 10 shares. Hint: the share dividend does not change the market value of the firm). The information is shown in the following table.

Table 1-3 Component stocks of Index X

Assuming instead that, firm D declares a share dividend after the market

(c-1) Fill in the blanks

(c-2) What are the price weighted, value weighted, and equally weighted indices at time 1? What are the index returns in these cases?

Stocks PO MVO Rtn1 MV1 Share dividend A 10 100 10% ? No B 20 400 -10% ? No 30 300 4% ? No D 60 1.200 6% ? ? 10 for 10 Stocks PO MVO Rtn1 MV1 Share dividend A 10 100 10% ? No B 20 400 -10% ? No 30 300 4% ? No D 60 1.200 6% ? ? 10 for 10

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