Why AAPL can't just hop into the DJIA
Apple's stock recently crossed the $400 threshold, leading to speculation that the company could join the elite group of companies on the Dow Jones Industrial Average.
This speculation might be premature, as Eric Savitz writes for Forbes. There are financial hurdles preventing Apple from easily hopping on the DJIA. First, the DJIA is price-weighted, so any change in Apple's $400 stock would have a huge impact on the index. So much influence that Bespoke Investment Group said the DJIA would need to be renamed to the Dow Jones Industrial Apple.
Even a small US$1.82 change would cause the Dow Jones average to jump by 14 points. Imagine the boost the DJIA would get from Apple's stock price, which has climbed $90.89 in the past.
To lessen its impact, Apple could split its stock, but that's a move the company shows no interest in making. Apple has had ample opportunity to split its stock in the past and has not done so. It's not very likely Apple would do it now just to join the Dow Jones Industrial Average.
Apple's stock recently crossed the $400 threshold, leading to speculation that the company could join the elite group of companies on...
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