A price-weighted index consists of four stocks. They are: Stock W, 1 million shares outstanding, priced...
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A price-weighted index consists of four stocks. They are: Stock W, 1 million shares outstanding, priced at $200 per share Stock X, 15 million shares outstanding, priced at $25 per share Stock Y, 50 million shares outstanding, priced at $30 per share Stock Z, 10 million shares outstanding, priced at $8 per share The divisor is currently 2.00. Tomorrow, Stock Y does a one-for-7 reverse stock split, meaning that for every 7 shares a stockholder owns today, tomorrow that person will own one share. Assuming that nothing else changes today or tomorrow, what will the new divisor be tomorrow? Go out TWO decimal places. Answer: A price-weighted index consists of four stocks. They are: Stock W, 1 million shares outstanding, priced at $200 per share Stock X, 15 million shares outstanding, priced at $25 per share Stock Y, 50 million shares outstanding, priced at $30 per share Stock Z, 10 million shares outstanding, priced at $8 per share The divisor is currently 2.00. Tomorrow, Stock Y does a one-for-7 reverse stock split, meaning that for every 7 shares a stockholder owns today, tomorrow that person will own one share. Assuming that nothing else changes today or tomorrow, what will the new divisor be tomorrow? Go out TWO decimal places. Answer:
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To calculate the new divisor after the reverse stock split we can use the formula for the priceweigh... View the full answer
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