How Do You Determine The Stock Market Value?
The Dow Jones Industrial Average is an index of 30 blue-chip (high quality) stocks which account for about 25 percent to 30 percent of the total market value of all American stocks. The Dow was started in 1896 by Charles Dow, one of the founders of the Wall Street Journal, to try to gauge the performance of the economy. Dow calculated his index by adding up the share price of 12 (now 30) blue-chip stocks, and dividing the sum by 12. The index is no longer calculated using that method, as it didn’t act as a true measure of the stocks. Look up the stock prices of the 30 stocks that currently make up the Dow Jones Industrial Average and the Dow Divisor. The Dow Divisor is a calculation created by Dow Jones to account for companies splitting their stock or paying out dividends, which will change the price of the stock, but doesn’t change the value of the company. You can get these values from the Dow Jones website. Add up the prices of the 30 stocks in the DJIA. Divide the sum of the stock
