1. Sigismund owns 100 shares of the common stock of French Corp in which he has a basis of

$1,100. French declares a 10% stock dividend and Sigismund receives 10 shares of the common stock which are of the same class as the shares already owned.

1. How many shares of the common stock does he own after the dividend?
2. Does he have to include the fair market value of the shares in his gross income?
3. What is his basis in the 10 NEW SHARES?
4. What is his holding period in the 10 NEW SHARES?
5. If instead of receiving 10 shares of the common stock, assume he receives 10 shares of French preferred stock. After the distribution the Preferred stock is worth $2,000 and the common stock is worth $9,000. What is the basis of the 10 New Shares of Preferred Stock?