On July 1, Alan Rees, sole proprietor of Kee Nail, transferred all of Kee's assets to Merit, Inc, a new corporation, in exchange for some of Merit's stock. Al Clyde, who is not related to Rees, also bought some of Merit's stock on July 1 Merit's outstanding capital stock consisted of 1,000 shares of common stock with a par value of $100 per share. For the transfer of Kee Nail's assets to be tax-free, what is the minimum number of shares of Merit's stock that must be owned by Rees and Clyde immediately after the exchange? A. 501 OB. 801 C. 500 D. 800