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The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an
The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2for-1 stock split on January 1, 2023. a. What is the new divisor for the index? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. b. Calculate the rate of return on the index for the year ending December 31,2023, if Douglas McDonnell's share price on January 1 , 2024 , is $26.40 per share. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places
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