Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

A market value weighted index has three stocks in it, call them A, B, and C, priced at 52, 98, and 89 per share. Each

A market value weighted index has three stocks in it, call them A, B, and C, priced at 52, 98, and 89 per share. Each firm has 116, 205 and 164 thousand shares outstanding, respectively. The value of the index at close of trading day is 883. At this time, the index decides to remove stock C from the index, and in its place to insert stock D. Stock D has a closing price of $81 per share, and 226 thousand shares outstanding. What is the new value of the index divisor, after the substitution?

Enter answer accurate to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

20th Edition

1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870

Students also viewed these Finance questions