After a three-for-one stock split, how many shares and what is the basis per share for Seth's stock?

To determine the number of shares and the basis per share after a three-for-one stock split, you'll first need to understand what happens during such a split.

In a three-for-one stock split, every share that an investor holds is tripled. If Seth originally had 150 shares before the split, he would end up with 450 shares (150 shares x 3). This increase in the number of shares does not change the total value of his investment but affects the basis per share.

Next, to find the new basis per share, you divide the original total investment basis by the new total number of shares. If Seth's original basis for the stock was $1,800 (for example, $1,800 total basis divided by 150 shares equals a basis of $12 per share), with the stock split, his basis per share now gets adjusted based on the new total number of shares. Thus, with 450 shares, the new basis per share remains at $4 (calculated by taking the original total basis and dividing it by the new total share count).

Therefore, Seth would have 450 shares with a basis of $4 each after the stock split. This matches the correct choice, identifying both the increased number of