17-13A. (Stock split) You own 20 percent of Rainy Corp., which recently sold for $86 before a planned two-for-one stock split announcement. Before the split there are 80,000 shares of common stock outstanding.

a. What is your financial position before the split, and what will it be after the stock split?

(Assume the stock falls proportionately.)

b. Your stockbroker believes the market will react positively to the split and that the price will fall only 45 percent after the split. If she is correct, what will be your net gain?