3.Consider the three stocks in the following table. P t represents price at time t, and Q1 represents shares outstanding at time t. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 90 100 96 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 a.Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t=1). b.What must happen to the divisor for the price-weighted index in year 2? Calculate the rate of return for the second period (t=1 to t=2)

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.