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Question

Finance

.

31 DECEMBER 2019

31 DECEMBER 2020

Price

Shares outstanding

Price

Shares outstanding

Share K

20

100 000 000

32

100 000 000

Share M

80

2 000 000

45

4 000 000*

Share R

50

25 000 000

42

25 000 000

*Share split two-for-one during the year.

A. Based on the info in the table, compute 2019 and 2020 values for a price-weighted index and a market-value-weighted index. (1.5 marks)

B. Compute the percentage change in the value of each index during the year. (1 mark)

C. Explain the difference in results between the two indices. (0.5 mark)

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