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22 December, 23:59

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $94, $312, and $90, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-weighted index?

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  1. 23 December, 00:21
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    Answer: The new divisor for the price-weighted index is 0.77982

    Explanation:

    Divisor = [ (94 + 312/2 + 90) / [ (94 + 312 + 90) / 3]

    = 0.77982
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