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9. Four companies belong to a group and are listed on a stock exchange. The cross-holdings of these companies are as follows: - Company A
9. Four companies belong to a group and are listed on a stock exchange. The cross-holdings of these companies are as follows: - Company A owns 20 percent of Company B and 10 percent of Company C. - Company B owns 15 percent of Company C. - Company C owns 10 percent of Company A, 10 percent of Company B, and 5 percent of Company D. - Company D has no ownership in any of the other three companies. Each company has a market capitalization of $50 million. You wish to adjust for crossholding in determining the weights of these companies in a free-float market capitalization-weighted index. a. What are the market capitalizations of each company after adjustment to reflect free float? b. What would be the total adjusted market cap of the four companies
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