Market Capitalization = Latest Closing Share Price x Total Number of Shares Outstanding Conversely, the Dow Jones Industrial Average (DJIA) is price-weighted, meaning that the value of the DJIA is based on the average stock prices of the 30 companies tracked by the index. Therefore, the average...
Despite its limitations, the Dow still serves three important functions in today’s marketplace: The long history of the Dow serves as a reminder of and comparison for today’s market as compared to early markets. Trend analysis is always important when trying to forecast the future, and the ...