OC) 0.1105

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Question
At the end of trading on day 1, a price-weighted index's value is 995.2. If stock Z
undergoes a 2-for-1 stock split after the market closes on day 1, what is the new
divisor?
Stock Day 1
Day 2
Day 1
Day 2
closing
closing
Shares
Shares
price (P1)
price (P2)
(Q1)
(Q2)
X
$45
$40
3,000,000
3,000,000
Y
$33
$32
6,000,000
6,000,000
Z
$68
$34
4,000,000 8,000,000
OA) 0.1454
B) 0.0978
OC) 0.1105
D) 0.1032
Transcribed Image Text:At the end of trading on day 1, a price-weighted index's value is 995.2. If stock Z undergoes a 2-for-1 stock split after the market closes on day 1, what is the new divisor? Stock Day 1 Day 2 Day 1 Day 2 closing closing Shares Shares price (P1) price (P2) (Q1) (Q2) X $45 $40 3,000,000 3,000,000 Y $33 $32 6,000,000 6,000,000 Z $68 $34 4,000,000 8,000,000 OA) 0.1454 B) 0.0978 OC) 0.1105 D) 0.1032
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