S purchased 200 shares of C, Inc., common stock on January 1, 2006 for $2,200.On December 15 of the current year, C, Inc., issued a 10 percent common stock dividend giving him 20 additional shares.D's basis in each share of common stock after the dividend is

Question

Quizplus · Accepted Answer

The total number of shares owned by S after the dividend is 220 (200 + 20). The total value of S's investment is still $2,200, but now split among 220 shares. Therefore, the basis in each share is $10 ($2,200 ÷ 220).

S Purchased 200 Shares of C, Inc