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Bob owns 100 shares of ACT Corporation common stock with a basis of $3,500 and an FMV of $12,000. Bob receives 10 stock rights as

Bob owns 100 shares of ACT Corporation common stock with a basis of $3,500 and an FMV of $12,000. Bob receives 10 stock rights as a nontaxable distribution and no basis is allocated to the stock rights. With each stock right, Bob may acquire one share of stock for $25. Bob exercises all 10 stock rights. The total basis of the newly acquired stock is

a. $0. b. $250. c. $350. d. $1,200.

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