Adjusted for Stock Splits, the Price of Microsoft Shares Rose

question 146

Short Answer

Adjusted for stock splits, the price of Microsoft shares rose 88.3%, 56.4%, 114.6%, and 68.4% in the years 1996 to 1999 respectively. In 2000, the share prices fell 62.8%.
a) What was the overall five-year percent change in the price of Microsoft shares?
b) If the share price at the end of 2000 was $43.38, what was the price at the beginning of 1996?

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Definitions:

Total Welfare

The total economic well-being that a society achieves, including both consumer surplus and producer surplus.

Consumer Surplus

The contrast between what consumers intend to spend on a good or service and the actual amount they part with.

Producer Surplus

The difference between how much producers are willing to accept for a good versus how much they actually receive.

Price Support

Price set by government above free-market level and maintained by governmental purchases of excess supply.