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The Dow, Nasdaq and S&P 500 are all market ... (the stock price multiplied by the number of each company’s outstanding shares). This formula means that larger companies carry more weight than ...
Chevron was previously a Dow component from July 18, 1930, to November 1, 1999. During Chevron's absence, its split-adjusted price per share went from $44 to $85, while the price of petroleum rose from $24 to $100 per barrel. [13] On September 22, 2008, Kraft Foods Inc. replaced American International Group (AIG) in the index. [14] [15]
Unlike the market cap-weighted S&P 500 and Nasdaq Composite, where larger companies exert more influence on these respective indexes, the Dow is a share price-weighted index.
Over the past decade, the company has increased its dividend by 168% and reduced its share count by nearly 10% -- which is impressive considering its high stock-based compensation expense.
Moreover, investors tend to evaluate stock prices relative to earnings. Given this measure, investors might happily pay $704,000 per share when it produces tens of thousands per share in returns ...
Stock market indices may be categorized by their index weight methodology, or the rules on how stocks are allocated in the index, independent of its stock coverage. For example, the S&P 500 and the S&P 500 Equal Weight each cover the same group of stocks, but the S&P 500 is weighted by market capitalization, while the S&P 500 Equal Weight places equal weight on each constituent.
The S&P 500 and Nasdaq-100 are weighted by market cap -- the more valuable a company is, the greater the portion of the index its stock makes up. The Dow, by contrast, is price-weighted, so the ...
Market cap is given by the formula =, where MC is the market capitalization, N is the number of common shares outstanding, and P is the market price per common share. [ 8 ] For example, if a company has 4 million common shares outstanding and the closing price per share is $20, its market capitalization is then $80 million.