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Consider the three stocks in the following table. Pe represents price at time t, and Q, represents shares outstanding at time t Stock C
Consider the three stocks in the following table. Pe represents price at time t, and Q, represents shares outstanding at time t Stock C splits two-for-one in the last period. Qe P1 P2 Q2 A 80 100 85 100 85 100 B 40 200 35 200 35 200 C 80 200 90 200 45 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (r=0 to -1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return 96.67 % b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Divisor 2.59
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