I own 8 percent of the Standlee Corporation’s 30,000 shares of common stock, which most recently traded for a price of $98 per share.

The company has since declared its plans to engage in a 2-for-1 stock split.

a. What will my financial position be after the stock split, compared to my current position? 

b. The executive vice-president in charge of finance believes the price will not fall in proportion to the size of the split and will only fall 45 percent because she thinks the pre-split price is above the optimal price range. If she is correct, what will be my net gain from the split?

Assume that you write a column for a very widely followed financial blog titled “Finance Questions: Ask the Expert.” Your job is to field readers’ questions that deal with finance. This week you are going to address two questions from your readers that have to do with dividends.