Tom owns 100 shares of common stock of Grow Company, which he acquired in2013 for $22,000 ($220 per share). On March 1, 2016, Grow Company's board ofdirectors declared a proportionate 10% stock dividend to all common stock shareholders effective May 15, 2016. Tom received 10 shares of common stock onMay 15, 2016 when the shares were trading at $300 per share. 

What is Tom's dividend income and basis in the new shares?

          Dividend Income    Per Share Basis in 10 Shares

a.             $0                                                $0

b.             $0                                                $200

c.              $3,000                                         $300

d.              $3,000                                           $227

Answer rating: 100% (QA)

c 3000 300 Toms dividend income is 3000 which is cal... View the full answer