Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $72, $400, and $98, respectively. If Baker undergoes a 3-for-2 stock split, what is the new divisor for the price-weighted index? (

1.22K views
0

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $72, $400, and $98, respectively. If Baker undergoes a 3-for-2 stock split, what is the new divisor for the price-weighted index? (

0

Solution

we have been given that,

Able, Baker, and Charlie are the only three stocks in an index.

The stocks sell for $72, $400, and $98, respectively.

If Baker undergoes a 3-for-2 stock split.

 

After split of the share of Baker  undergoes the split of 3 for2, the new price of the share after the split (which will be roughly 2/3 after the split, though not exactly) will be multiplied by 3.

Contact us today

Ask for our academic services

Copyright SmartStudyHelp 2016. All Rights Reserved