Say we have three stocks. A $30 1000 shares B $50 2000 shares c $60 3000 shares I get price weighted which is just the three prices divided by the index divisor which changes due to SS. however what’s the difference between share weighted and value weighted.
When it is value weighted - there is an automatic adjustment that will get built in, because # of shares will increase, but value per share will go down (straight stock split situation) or value goes up, # shares come down (reverse stock split). So just calculate market value as before == #shares * Price/Share and calculate index, recalibrate on base year. CP
market share weighted is equal $ in each. market value is total market cap weight
so you would calculate how many shares give you the same value? What value would you use? Could you give a real quick example please?
look in the text. They would give you the old and new values and the base index to calculate. you do not calculate the # of shares.