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

Question

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $93, $312, and $78, respectively. If Baker undergoes a 4-for-1 stock split. What is the new divisor now? (Do not round intermediate calculations. Round your answer to 5 decimal places.)

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $93, $312, and $78, respectively. If Baker undergoes a 4-for-1 stock split. What is the new divisor now? (Do not round intermediate calculations. Round your answer to 5 decimal places.)

Explanation / Answer

baker undergoes 4-for-1 split

so ,

price of share of baker = 312/4 = 78

new divisor = (93 + 78 + 78)/ [(93 + 312+78)/3]

= 249/161

= 1.54658

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