Kevin Buys One Share of Mink,Inc $\text { Common } \quad \text { Freferred }$

Short Answer

Kevin buys one share of Mink,Inc.,common stock for $100.On February 3 of the current year,the corporation makes a nontaxable distribution of one share of preferred stock to all holders of record of common stock.On the distribution date,the common stock is trading at $250 and the preferred stock is trading at $50.After the distribution,Kevin's bases in the two shares of stock are:
$\text { Common } \quad \text { Freferred }$
a. $\$ 50.00 \quad \$ 50.00$
b. $\$ 100.00 \quad \$ - 0 -$
c. $\$ 83.33 \quad \$ 16.67$
d. $\$ 250.00 \quad \$ 50.00$
e. $\$ 80.00 \quad \$ 20.00$