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I always hear of dow returns and dow returns with dividends included. Does the price given reflect that?

I would think no, but then I went here:

http://finance.yahoo.com/q/hp?s=%5EDJI

and it shows the adjusted close is the same as the regular close. So are dividends included?

2007-07-05 13:22:56 · 3 answers · asked by ben_ev0lent 1 in Business & Finance Investing

3 answers

An index is not a company and doesn't pay dividends. So the answer is "no". The index ignores dividends.

When you see "dividend adjusted return", or some similar term, somebody has done a lot of arithmetic and calculated what a portfolio would have returned if it had been invested in Dow stocks in the same proportions as in the index. Since this portfolio in in actual stocks, it would receive the dividends of the companies in the index as well as capital gains/losses on the stock prices.

2007-07-05 14:17:44 · answer #1 · answered by Ted 7 · 0 0

The Dow is an index calculated by adding up the prices of the individual stocks and dividing by a divisor. The index is a unitless indicator of the direction of the prices. The divisor is calculated such that it takes into account stock splits and dividends.

2007-07-05 15:37:17 · answer #2 · answered by jeff410 7 · 0 0

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2016-02-16 14:49:48 · answer #3 · answered by Anonymous · 0 0

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