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Narrow-Based Weighted Average

What is 'Narrow-Based Weighted Average'

An anti-dilution provision used to ensure that investors are not penalized when companies are undergoing additional financing or issuing new shares. A narrow-based weighted average takes into account only the total number of outstanding preferred shares for determining the new weighted average price for the old shares.

Explaining 'Narrow-Based Weighted Average'

The new weighted average price is adjusted for the preferred shareholder, thus providing protection against dilution. The narrow-based method is the most favorable for investors, as it lowers the price of the preferred shares more than other methods.


Further Reading


Trunk, head, and step characteristics during normal and narrow-based walking under deteriorated sensory conditions
www.tandfonline.com [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …

A second-best evaluation of eight policy instruments to reduce carbon emissionsA second-best evaluation of eight policy instruments to reduce carbon emissions
www.sciencedirect.com [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …

Fiscal policy, conflict, and reconstruction in Burundi and RwandaFiscal policy, conflict, and reconstruction in Burundi and Rwanda
www.econstor.eu [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …

Understanding price-based antidilution protection: Five principles to apply when negotiating a down-round financingUnderstanding price-based antidilution protection: Five principles to apply when negotiating a down-round financing
heinonline.org [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …

Anti-Dilution ProvisionsAnti-Dilution Provisions
heinonline.org [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …

Tax system reform in India: Achievements and challenges aheadTax system reform in India: Achievements and challenges ahead
www.sciencedirect.com [PDF]
… with a stiffness of 13.13 kN/m and a linear relationship between weight applied and … Narrow-based walking condition and compliant walking surface significantly increased step length variability in both … For older people, the weighting of the vestibular input for head control was …



Q&A About Narrow-Based Weighted Average


How do you calculate a narrow-based weighted average?

The calculation for a narrow based weighted average is as follows, Wt = ∑(Wt1 × S1) + (Wt2 × S2) + ... + (WtN × Sn), where Wt represents the weighting factor, S1 represents the stock price, and N represents number of stocks in the index.

What are some examples of narrow-based indexes?

Some examples include small cap indexes such as Russell 2000 Index or Standard & Poor's SmallCap 600 Index. Other examples include mid cap indexes such as Russell Midcap Index or Standard & Poor's MidCap 400 Index and large cap indexes such as Dow Jones Industrial Average or Standard & Poor's 500 Index.

What is the difference between a weighted average and an unweighted average?

A weighted average takes into account the relative pricing of securities. An unweighted average does not take into account the relative pricing of securities.

What is the purpose of a narrow-based weighted average?

The purpose of a narrow-based weighted average is to ensure that investors are not penalized when companies are undergoing additional financing or issuing new shares.

Who benefits from this method?

Investors benefit from this method because it lowers their share price more than other methods.

How does a narrow based weighted average work?

A narrow based weighted average takes into account only the total number of outstanding preferred shares for determining the new weighted average price for the old shares.

Why would investors use these types of indexes?

Investors may use these types of indexes to gain exposure to smaller companies that they otherwise might not be able to invest in due to their size restrictions on individual stocks. These indexes also allow investors to diversify their portfolios without having to buy multiple stocks individually which can be costly if done so manually through brokerage accounts. These funds are typically passively managed which means they will attempt replicate an index by buying all components within it rather than trying to beat it like actively managed funds tend to do by buying only those stocks that have shown potential for growth over time while avoiding those that

What does narrow-based weighted average mean?

Narrow-based weighted average means anti-dilution provision.

What is a narrow-based weighted average?

A narrow-based weighted average is a security index that has at least 90% of its value from companies with market capitalization below $50 million in value.