The following three defense stocks are to be combined into a stock index in January 2013 (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, 2014.

	Price
	Shares (millions)		1/1/13			1/1/14			1/1/15
Douglas McDonnell	530		$	62		$	66		$	81
Dynamics General	230			34			28			42
International Rockwell	330			63			52			68

a.	What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

New divisor

b.	Calculate the rate of return on the index for the year ending December 31, 2014, if Douglas McDonnells share price on January 1, 2015, is $23.70 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Rate of return

%