The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020.

a. What is the new divisor for the index?

b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnells share price on January 1, 2021, is $24.36 per share.

The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2 -for-1 stock split on January 1, 2020. a. What is the new divisor for the index? (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, 2020, if Douglas McDonnell's share price on January 1 , 2021, is \$24.36 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)