Cohen Corporation Owns 1,000 Shares of Common Stock of Berg

Cohen Corporation owns 1,000 shares of common stock of Berg, Inc., a large publicly traded company listed on a major stock exchange. If Berg issues a 20 percent stock dividend when the par value is $10 per share and the market value is $70 per share, how much and what type of income should Cohen report?

A) $0
B) $2,000 ordinary income
C) $14,000 ordinary income
D) $2,000 ordinary income and $12,000 extraordinary income