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I'm digging into some of our financial ancient history. I bought Pepsico stock in 1997. Later that year, they spun off their restaurant division into a separate company and Pepsico shareholders were given 1 share of the new stock, YUM, for every 10 shares of PEP they owned. At some later date, YUM then spun off their China division and issued a third stock. YUM also split a couple of times.
So from my initial purchase of 100 shares of Pepsi, I now own 100 shares of Pepsi, 40 shares of YUM, and 40 shares of YUM-China.
If I decide to sell any of those shares, what do I use as my cost basis? I know what I paid for the Pepsi originally. No dividends have been reinvested along the way. Is the cost basis on YUM and YUM-C zero? How does that work?
So from my initial purchase of 100 shares of Pepsi, I now own 100 shares of Pepsi, 40 shares of YUM, and 40 shares of YUM-China.
If I decide to sell any of those shares, what do I use as my cost basis? I know what I paid for the Pepsi originally. No dividends have been reinvested along the way. Is the cost basis on YUM and YUM-C zero? How does that work?
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