A two for one stock split causes the divisor in a price-weighted series to decline.

Name: A two for one stock split causes the divisor in a price-weighted series to decline.
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Question

Quizplus · Accepted Answer

When a two for one stock split occurs, the number of outstanding shares doubles, but the total value of the shares remains the same. As a result, the divisor in a price-weighted series will decline to reflect the increase in the number of shares.

A Two for One Stock Split Causes the Divisor in a Price-Weighted