After a stock split of three for one, how many shares and what is the new basis per share for Seth’s stock originally purchased at a basis of $1,800?

To determine the correct number of shares and the new basis per share following a three-for-one stock split, it’s essential to understand how stock splits affect both the number of shares owned and the basis per share.

Initially, we have to analyze how many shares Seth originally owned and then see how the stock split impacts that number. The question does not explicitly state how many shares were originally purchased, but we can derive that from the total basis given. If Seth's total investment was $1,800 and we need to calculate the number of shares after the split, we need an assumption about the original number of shares.

After a three-for-one stock split, every share owned by the stockholder is converted into three shares. Thus, if we assume Seth owned a certain number of shares before the split, multiplying that by three will give us the new total number of shares.

Considering the basis per share, the original basis of $1,800 is then divided by the new total number of shares after the stock split.

If the correct choice states that Seth ends up with 450 shares, this indicates that he originally had 150 shares before the split (since 150 x 3 equals 450). The new basis per share would be calculated by