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Page 161 List of Corporations on DJIA
The DJIA list modifications are a rare but necessary step in an effort to closely reflect and gauge the stock market as a whole. There are still only 30 stocks in the list, and the DJIA is calculated by summing up their values and dividing the total by a divisor. The divisor is always adjusted to account for things such as stock splits and dividend payouts, so the average can be correctly calculated. It is not 30 (as of this writing it is approximately 0.204), as you might have thought. But if none of the stocks ever split or paid dividends, the divisor would have been 30. So the strength of the US market is mostly gauged by the value of DJIA. … |
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