What is the new divisor for the index

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Question - 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 7-for-1 stock split on January 1, 2017.

Price Shares (millions) 1/1/16 1/1/17 1/1/18

Douglas McDonnell 360 $65 $63 $83

Dynamics General 450 52 53 60

International Rockwell 170 81 88 86

What is the new divisor for the index, assuming the initial divisor was 3?

Reference no: EM132493193

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