Kevin Buys One Share of Mink, Inc

Multiple Choice

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:
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Common Preferred

A) $50.00 $50.00
B) $100.00 $- 0 -
C) $83.33 $16.67
D) $250.00 $50.00
E) $80.00 $20.00