QUESTION 1

Suppose there are only two stocks in the market and the following information is given:

	Shares Outstanding	Beginning of Year Price	End of year Price
Ally Co.	100 million	$60	$66
McBeal, Inc.	400 million	112	100

Suppose that McBeal splits 2-for-1. Based on beginning information, what is the new divisor? (Note: Before the split, the divisor is 2. Round your answer to four decimal places.)

QUESTION 2

On August 30, 2010, the DJIA closed at 10,457.31. The divisor at that time was 0.12091. What would the new index level be if all stocks on the DJIA increased by $6.00 per share on August 31, 2010?