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Lumos Networks Corp. Message Board

  • red777aetrof red777aetrof Mar 10, 2012 1:04 PM Flag

    How to allocate cost basis

    From the NTLS board discussion,...

    Take first day trading which was Nov 1st (disregard oct 31 as some stock of LMOS somehow traded when-issued), and LMOS stock closed at $14.86 while NTLS closed at $25.03 -- source Yahoo Finance. therefore 62.75% of your ORIGINAL cost basis is in NTLS shrs and the balance 37.25% of your basis is in LMOS shrs.

    For each 100 shrs of NTLS prior to split, you now have 50 shrs of each of LMOS and new NTLS, for a total of 100 shrs combined.

    Therefor if your original basis was $10 per share in NTLS for 100 shares (or $1000 total), then your basis in this example is $7.45 per LMOS share (37.25% x 2, since 1:2 split, times original $10 basis per share) and your basis for the NTLS shares now held is $12.55/shr (62.75% x 2, due to 1:2 split, times original per shr $10 basis). Thus your basis is 50 shrs of LMOS at $7.45/shr and 50 shrs of NTLS at $12.55/shr, which together would sum, lo and behold, $1000, which foots to your original investment basis.

    Hope that helps.

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