These four common stocks issued no-additional shares and had no stock dividends or splits. Ignore cash dividend payments when computing the price…
2023 · Solved Question with Answer
These four common stocks issued no-additional shares and had no stock dividends or splits. Ignore cash dividend payments when computing the price index.
| Stock | Total shares outstanding on both dates |
Date (July 16, 2020) |
Date (July 16, 2021) |
| A | 60,000 | Rs 1000 | Rs 600 |
| B | 50,000 | Rs 1000 | Rs 2000 |
| C | 100,000 | Rs 200 | Rs 300 |
| D | 50,000 | Rs 100 | Rs 40 |
a. Calculate and interpret the value of the index as on July 16, 2021 assuming that the new four-stock index is (i) value-weighted, (ii) price-weighted, and (iii) equally-weighted.
b. Describe the uses of market index. Sonnet 4.5Cl