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Definition of 'Index Divisor'
A number used in the denominator of the ratio between the total value of an index and the index divisor. The number, which typically has little mathematical rationale behind it, remains consistent and therefore enables comparability within the index over time.
How the value of the index is computed depends on the type of index under consideration.
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Investopedia explains 'Index Divisor'
An index divisor is a crucial number in the calculation of the value of an index. It is the basis for comparability across time, and the starting point for adjustments that need to be made due to changes in the equity composition of the underlying companies in the index.
Some of the adjustments that may need to be made to the divisor include changes in the number of shares floated by a company, any rights offerings made to employees or management, and any share repurchases.
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Search results for 'Index Divisor'
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http://www.investopedia.com/articles/02/082702.asp
... To calculate the DJIA, the current prices of the 30 stocks that make up the index
are added and then divided by the Dow divisor, which is constantly modified. ...
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http://www.investopedia.com/articles/analyst/102501.asp
... up the per-share price of the stocks of each company in the index and dividing ...
spin-offs and other events have resulted in changes in the divisor, making it a ...
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http://www.investopedia.com/articles/stocks/12/history-wall-street-profitability.asp
... at the end of a trading day is the sum of all stocks in the index divided by the
number of stocks in the index, with revisions in the divisor made for ...
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http://www.investopedia.com/ask/answers/08/find-30-dow-stocks.asp
... most watched indicator, the Dow Jones Industrial Average is a price-weighted index. ...
However, the current divisor now equals a fraction of 1% due to years of ...
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http://stocks.investopedia.com/stock-analysis/2012/Big-Buys-In-Share-Buybacks-PKW-TTFS-AMGN-AZN-MSFT0127.aspx
... have taken to buying up their own stock and the S&P 500's divisor, a measure of ... The
PowerShares Buyback Achievers (ARCA:PKW) tracks an index of firms that has ...
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http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/characteristics-fras-forward-rate-agreements.asp
... 4.10 Types of Unemployment; 4.11 The Consumer Price Index & Inflation; 4.12
Aggregate Supply & Aggregate Demand; 4.13 Short and Long ...
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