Question: 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

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 ?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

There are two stocks, A and B, which make up a particular market cap weighted index. Given below are the closing prices and number of shares outstanding for each stock for both yesterday and today....

2.) (8 points) There are two stocks, A and B, which make up a particular market-cap weighted index. Given below are the closing prices and number of shares outstanding for each stock for both...

2.) (6 points) There are two stocks, A and B, which make up a particular market cap weighted index. Given below are the closing prices and number of shares outstanding for each stock for both...

There are two stocks, A and B, which make up a particular price weighted index. Given below are the closing prices and number of shares outstanding for each stock for yesterday and today. Stock B...

You have two stock indexes, one price-weighted and one value-weighted, with the same two stocks, TUL and NOLA. At the beginning of the period, TUL has a price of $12. At the end of the period, TUL's...

share, respectively. The current index divisor is 2.75. Number shares outstanding for the stocks; A 24. A price-weighted index consists of stocks A, B, and C which are priced at $50, $35, and SSA...

Individual Assignment 2 Instructions to students: This assignment should be completed in handwritten form individually and neatly in A4 single line paper using blue or black ball pen. 2. Plagiarism...

Question #1 Consider two stocks, A and B, with the following prices on two given dates. (Date 2 prices are pre-split.) Stock A B Date 1 $10 $5 Date 2 $20 $8 On Date 1, there are 100 shares of stock A...

Below is the information on the stock prices and shares outstanding of four stocks. Note that the numbers are for illustration purposes and do not reflect the most updated market information on these...

What is the work when 2,345 mL of gas contract to 887 mL under an external pressure of 348 torr?

A rugby shirt that was originally priced at $89.95 is marked down 35%. Madison has a coupon for 15% off the reduced price. How much will Madison pay for the shirt? What is the total rate of reduction?

19. What factors influence the dividend policy of a company?

Within a continuously competitive global business environment, publicly held companies face constant pressure to generate and report positive financial results. Unfortunately, some leaders may be...

=+1. Describe the value chain of the media industry!

=+2. What are the core assets and core competencies in media enterprises?

=+3. Draw the submodels of an integrated business model!