Apple Inc. 4-for-1 is planning a stock split and has significant implications for the Dow Jones Industrial Average, of which it is a key component.
The iPhone maker announced on Thursday that its board approved the stock split. The split will affect owners of records as of August 24 and Apple shares AAPL,
Which closed at $ 384.76 on Thursday, will trade on a split-adjusted basis on August 31.
Because the Dow DJIA,
There is a price-weighted index, with a scheduled split at the end of next month that Apple will move from the most influential component of the 30-member blue-chip index to a member of the 15- or 16-most important index.
The Dow’s denomination means that the value of a stock gauge is determined by the price changes of its components, not by changes in percentages. The overall value of the index is calculated by adding the price of the components and dividing by the so-called Dow divider, which is currently 0.14744568353097.
This means that each dollar of the company translates to a 6.78-point swing in the 124-year benchmark-driven.
The divisor accounts for the division of the stock, so in this way Apple’s 4-for-1 split will change its own effect on the benchmark and the divisor by which the index is calculated. The separator is determined by the S&P Dow Jones Indis, which owns the Dow index.
UnitedHealth Group Inc, UNH
Which closed at $ 305.33, could become the Dow’s most influential member in late August. Home Depot Inc. Hd,
Dow currently holds a third priceless stock, with Thursday trading ending at $ 266.31.
Apple is the largest and most influential, Dow component since April 29, according to Dow Jones market data.
Other indices, including the S&P 500 Index SPX
And Nasdaq Composite Index Comp,
Market-capitalizations are weighted, so they are influenced by the overall value of their components.
According to FactSet data, Apple is currently the largest market cap company. Microsoft MSFT,
Ranked $ 1.54 trillion, while Amazon.com Inc. AMZN,
Is the third-most valued US company at $ 1.513 trillion.
It is for this reason that large capitalization components have had an external impact on broader market returns, excluding the Dow, as the stock recently hit its nadir in late March.
For example, the price-weighted Dow has lost 41.5% since March 23, while the S&P 500 has returned 45% and the Nasdaq has climbed 54% in the same period.
Apple became a Dow member in March 2015. Back to, AT&T.
Cupertino, California was moved out in return. Technology based eunuch.
Segmentation of shares into Dow components is not uncommon. Nike Inc NKE,
Announced a 2-for-1 stock split back in December 2015.
Apple’s share-split was announced on Thursday after reporting the COVID-19 crisis to report record results. The company posted net income of $ 11.25 billion in the year-ago quarter, or $ 10.04 billion from the stock of $ 2.58, or $ 2.18 per share. Analysts polled by FactSet expected $ 2.05 per share.