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During 2005, John Johnson purchased 50 shares of common stock in Corporation DEF for $4,500....

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Accounting

During 2005, John Johnson purchased 50 shares of common stock in Corporation DEF for $4,500. In 2011, DEF declared a stock dividend of 20 percent. The new stock received by John in the stock dividend was identical to the old stock. In 2015, DEFs stock split 3 for 1 at a time when the fair market value was $120 per share. What is Johns basis in each of his shares of DEFs stock if both distributions were nontaxable?

a. $120 per share

b.$90 for 50 shares and zero for all additional shares

c.$75 for 60 shares and $142.50 for 120 shares

d.$25 per share

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