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The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an
The following three defense stocks are to be combined into a stock index in January 2016 (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, 2017.
Price | ||||||||||
Shares (millions) | 1/1/16 | 1/1/17 | 1/1/18 | |||||||
Douglas McDonnell | 420 | $ | 63 | $ | 67 | $ | 84 | |||
Dynamics General | 450 | 53 | 47 | 61 | ||||||
International Rockwell | 250 | 82 | 71 | 87 | ||||||
a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
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