Question: Consider a hypothetical price-weighted index created using the three stocks below: Stock Price before split Price after split Outstanding Shares (mil) before split Outstanding Shares
Consider a hypothetical price-weighted index created using the three stocks below:
| Stock | Price before split | Price after split | Outstanding Shares (mil) before split | Outstanding Shares (mil) after split |
| X | $80 | $80 | 400 | 400 |
| Y | 100 | 100 | 1000 | 1000 |
| Z | 70 | 7 | 500 | 5000 |
Yesterday before market close, Stock Z has completed a 10-for-1 split. Prices before and after the split are listed above. Before the split, you were holding 4 shares of each of the stocks.
Prior to Stock Zs 10-for-1 split, the 3-stock index's divisor is 3. What would be the new divisor after the split?
Round your answer to the nearest two decimal places, i.e., 0.01.
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