Which of the following would not be a reason to adjust the divisor of a price-weighted index?

Question

Quizplus · Accepted Answer

Paying a cash dividend does not affect the divisor in a price-weighted index because such dividends do not alter the stock's price in a manner that requires an adjustment to the index calculation. Adjustments are typically made for stock splits and changes in the composition of the index to ensure the index reflects only the changes in stock prices, not the number of shares or the stocks included.

Which of the Following Would Not Be a Reason to Adjust