On January 4, 20X1, Ray Zeyke purchased 100 shares of common stock in Windows Corporation for $40 per share. Six months later he purchased 60 more shares at $50 per share. On December 1, 20X1, Ray received a 25 percent nontaxable stock dividend. The new and the old stock are identical. What is the amount of Ray's basis in each share of stock?

a) 200 shares at $35 per share

b) 200 shares at $43.75 per share

c)125 shares at $32 per share and 75 shares at $40 per share

d) 125 shares at $40 per share and 75 shares at $50 per share