ABC receives a stock dividend of 50 shares from XYZ Company. ABC previously owned 500 shares of XYZ stock that had a cost basis of $3,135. The cost basis per share of XYZ stock is:

Question

Quizplus · Accepted Answer

The total cost basis remains $3,135, but now it is spread over 550 shares (500 original shares + 50 dividend shares), resulting in a cost basis per share of $3,135 / 550 = $5.70.

ABC Receives a Stock Dividend of 50 Shares from XYZ