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A Canadian resident individual received a stock dividend from a public corporation of one share....

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Accounting

A Canadian resident individual received a stock dividend from a public corporation of one share. The dividend is a taxable dividend. The stock dividend resulted in an increase in the paid-up capital of $4 for each share issued but the fair market value of each share is $9. Which of the following statements is correct about the stock dividend received?

A. The cost of the stock is deemed to be $4 and the individuals net income increases by $4.

B. The cost of the stock is deemed to be $4 and the individuals net income increases by $5.52.

C. The cost of the stock is deemed to be $9 and the individuals net income

D. The cost of the stock is deemed to be $9 and the individuals net income increases by $12.42.

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