USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
*2:1 Split on Stock Z after Close on Jan. 13, 2005
**3:1 Split on Stock X after Close on Jan. 15, 2005
The base date for index calculations is January 13, 2005
-Refer to Exhibit 4.2. What is the divisor at the beginning of January 16th?
A) 1.9375
B) 3.0
C) 2.5
D) 2.2734
E) 3.2852

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
  *2:1 Split on Stock Z after Close on Jan. 13, 2005
**3:1 Split on Stock X after Close on Jan. 15, 2005
The base date for index calculations is January 13, 2005
-Refer to Exhibit 4.2. What is the divisor at the beginning of January 16th?
A) 1.9375 
B) 3.0 
C) 2.5 
D) 2.2734 
E) 3.2852

Quizplus · Accepted Answer

The divisor at the beginning of January 16th is 1.9375. This is because the divisor is calculated by dividing the current price by the previous day's price. On January 15th, the price was 1.9375, so the divisor on January 16th is 1.9375.