10. John Smurt owns 80 percent of the common shares of Smurt Ltd. John's shares have an adjusted cost base of $600,000. The Smurt common shares have a total PUC of $1,000,000, and a total fair market value of $2,500,000. Using the provisions of ITA 86, John exchanged his shares for cash of $600,000 and preferred shares with a legal stated capital and fair market value of $1,400,000. What is the adjusted cost base of John's preferred shares? A. Nil. B. $250,000. (3. $1,400,000. D. $650,000