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Consider the three stocks in the following table. Pe represents price at time t, and Qc represents shares outstanding at time t. Stock C splits
Consider the three stocks in the following table. Pe represents price at time t, and Qc represents shares outstanding at time t. Stock C splits two for one in the last period. A B Po 75 95 55 go 375 850 1.se P1 Q1 80 375 90 850 60 1,050 P2 80 90 30 02 375 850 2,100 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to 1=1. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return b. Calculate the new divisor for the price weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.) New divisor c. Calculate the rate of return for the second period (t = 1 to t= 2). Rate of return %
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