A Price-Weighted Index Consists of Stocks A,B,and C Which Are

question 38

Multiple Choice

A price-weighted index consists of stocks A,B,and C which are priced at $27,$11,and $18 a share,respectively.The current index divisor is 2.24.If stock B undergoes a 1-for-3 reverse stock split,the new index divisor will be:

• A)1.9467.
• B)2.1806.
• C)2.2000.
• D)3.0842.
• E)3.1200.

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