Question: Problem 3: Use the facts below for Problem 3 Questions 1-3 In 2017, Kevin purchased 5,000 shares of Purple Corporation stock at $6 per share.

Problem 3: Use the facts below for Problem 3 Questions 1-3

Problem 3: Use the facts below for Problem 3 Questions 1-3 In 2017, Kevin purchased 5,000 shares of Purple Corporation stock at $6 per share. In 2019, he receives a 5% preferred stock dividend. At the time of the stock dividend, the common stock of Purple Corporation has a fair market value of $9 and the preferred stock has a fair market value of $12 per share. Problem 3 Question 1: What is Kevin's per share basis in the Purple Corporation common stock? a. $5.22 b. $4.50 c. $0 d. $6 Problem 3 Question 2: What is Kevin's per share basis in the Purple Corporation preferred stock? a. $0 b. $30 c. $7.83 d. $120 Problem 3 Question 3: How much taxable income does Kevin have as a result of the stock dividend? a. $0 b. $3,000 c. $1,500 d. $750

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