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Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year 2 Shares Shares Outstanding Price Outstanding 102,000,000 $34

Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year

Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year 2 Shares Shares Outstanding Price Outstanding 102,000,000 $34 48 42 Price $22 84 39 Stock K Stock M 2,300,000 28,000,000 Stock R Stock split two-for-one during the year. % a. Compute the beginning and ending values for a price-weighted index and a market-value-weighted index. Assume a base value of 100 and Year 1 as the base period. Do not round intermediate calculations. Round your answers to two decimal places. PWIyear 1 PWIyear 2: VWIyear 19 VWIyear 2: b. Compute the percentage change in the value of each index during the year. Do not round intermediate calculations. Round your answers to two decimal places. Percentage change in PWI: Percentage change in VWI: c. Compute the percentage change for an unweighted index assuming $1,000 is invested in each stock. Do not round intermediate calculations. Round your answer to two decimal places. 102,000,000 4,600,000 28,000,000 %

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SOLUTION To compute the beginning and ending values for a priceweighted index PWI and a marketvalueweighted index VWI we need to calculate the sum of the stock prices and market values respectively a ... blur-text-image

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