The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio managerbelieves these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnellshareholders approve a 2-for-1 stock split on January 1, 2020.Douglas McDonnellDynamics GeneralInternational RockwellNew divisorShares(millions)185Rate of return450270%1/1/19$ 694776Pricea. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimalplaces.)1/1/20$7240651/1/21$ 855479b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price onJanuary 1, 2021, is $26.15 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to2 decimal places.)

Price-Weighted Index:A price-weighted index's value is determined by adding the prices of all of its…

The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 185 Rate of return 450 270 % 1/1/19 $69 47 76 Price 1/1/20 $72 40 65 a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/21 $85 54 79 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $26.15 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 185 Rate of return 450 270 % 1/1/19 $69 47 76 Price 1/1/20 $72 40 65 a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/21 $85 54 79 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $26.15 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter10: The Cost Of Capital

Section: Chapter Questions

Problem 21SP: CALCULATING THE WACC Here is the condensed 2019 balance sheet for Skye Computer Company (in...

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The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 3-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor 2.322 Rate of return Shares (millions) 340 450 410 1/1/19 $103 % 45 74 Price a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/20 $106 39 63 Check my work 1/1/21 $118 53 79 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $39.33 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager belleves these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 3-for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 1/1/22 Rate of return 340 458 % 45 Price 1/1/23 a. What is the new divisor for the index? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. $ 106 39 63 1/1/24 $ 118 53 79 b. Calculate the rate of return on the index for the year ending December 31, 2023, if Douglas McDonnell's share price on January 1, 2024, is $39.33 per share. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager beleves these stocks are an approprlate benchmark for his or her performance): Priom Douglan HeDonnell Dynanicn Ceneral International Roekvell Sharee Imilliona) 355 455 270 1/1/19 $86 55 84 3/1/20 $91 52 1/1/21 $103 66 87 73 a. Calculate the initial value of the index if a price-weighting scheme is used. Index value b. What is the rate of return on this Index for the year ending December 31, 20197 For the year ending December 31, 20207 (A negative value should be Indicated by a minus sign. Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 2019 return 2020 retum
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Douglas McDonnell Dynamics General International Rockwell Index return Shares (millions) 195 455 230 % Index value 1/1/19 $ 97 27 56 Price a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31, 2019. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 1/1/20 $100 22 45 1/1/21 $113 36 62 b. If the index value is set to 100 on January 1, 2019, what will the index value be on January 1, 2020? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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