FLEHOE NRT PAGELAYOUT FORMILAS #1.bcel HOME INSERT PAGE LAYOUT FORMULAS DATA REV
ID: 2743294 • Letter: F
Question
FLEHOE NRT PAGELAYOUT FORMILAS #1.bcel HOME INSERT PAGE LAYOUT FORMULAS DATA REVEW VIEW DEVELOPER 19 s Prev Close 6 open Prev Close18,517.23 Day's Range 18,491.5918,571.30 18,524.15 52wk Range 15,370.33 18,622.01 How do I find the divisor and how would I do a 4-for-1 stock split on the data to the left this data it from today Dow jones Industrial Average 87,696 Avg Vol (3) 97,525,873 2) How do I find the weight of each company price in this list and what does it mean. Can you show me the process to caloulate the weight and interpret it on each price which is (30) 22-Jul-16 10 time: 2:53pm Top 30 Components do it on my own. Please use the data that is highlighted to do the calc 15 MMM 16 MRK 58.84 36.74 133.39 73.60 17 PFE 18 BA 20 UN 22 NKE 24 DIS 105.68 97.73 136.54 30.69 117.15 SheetlExplanation / Answer
Dow Jones Industrial Average is a price-weighted index. It is essentially the sum of the price of all 30 DJIA stocks divided by the divisor, which originally was 30. The divisor changes after corporate actions like split, bonus, etc. to reflect the change.
For example, one of the stocks in DJIA is ABC Inc, which is currently priced $100 and it has 100 shares oustanding. So, the market cap of ABC is $10,000. Now the company offers 4 for 1 stock split, which means that the total no of oustanding shares will be 400 but the market cap will remain $10,000, which implies that the price of the stock will be 10,000/400 = $25. So, in such a scenario the divisor will adjust to reflect the market cap of $10,000.
Let's understand how divisor changes with a small example of 2 stocks. One stock is priced $10 and other is priced $100. So, the average is $55. Now as indicated in the example above, the $100 stock splits into 4 and the new price will be $25, so the new divisor will be equal to (10+25)/55 = 0.6363. So DJIA divisor now is .6363 to reflect the original average of $55 = (10+25)/(0.6363) to reflect the stock split.
The current divisor for DJIA is 0.14602128.
Hope it helps!
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