Question

The table below reports the earnings per share of common stock for Home Depot Inc. for 2003 through 2012.

Year	Earnings per Share
2003	$	1.31
2004		1.65
2005		2.00
2006		2.33
2007		2.81
2008		2.97
2009		3.10
2010		3.24
2011		2.07
2012		2.46

Develop an index, with 2003 as the base, for earnings per share for years 2004 through 2012. (Round your answers to 1 decimal place.)

Year	Simple index
2004
2005
2006
2007
2008
2009
2010
2011
2012

Answer 1

Simple index formulae;

$P_{0,n}=\frac{P_{n}}{P_{0}}*100$

where, Pn is the price of current year. P0 is the price of the base year.

Here, 2003 is the base year. so, P2003 = 1.31

$P_{2003,2004}=\frac{1.65}{1.31}*100=125.9$ and so on..

Year	Earning share	Simple Index
2003	1.31	-
2004	1.65	125.9
2005	2.00	152.7
2006	2.33	177.9
2007	2.81	214.5
2008	2.97	226.7
2009	3.10	236.6
2010	3.24	247.3
2011	2.07	158.0
2012	2.46	187.8

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