Question

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.

Answer

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