How the Dow Is Calculated -- Seeking Alpha

To understand this, you need a quick history lesson. In 1896 to be exact the index consisted of just 12 stocks, and to get the average back then all you needed to do was divide the total price of all 12 stocks by 12... easy isn't it? But if that were the case today, it would mean that the basket of 30 stocks in the DJIA would sum to around 248,319 as of Friday May, 22 close anyway. As you may know, this is not how you get the average. Over time, stocks were added and taken out of the index, as well as stock splits and spinoffs, etc...

How the Dow Is Calculated -- Seeking Alpha