(EPS: Simple Capital Structure) A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows.
|
Income before extraordinary item |
$15,000,000 |
|
|
Extraordinary loss, net of applicable income tax (Note 1) |
1,340,000 |
|
|
Net income |
13,660,000 |
|
|
Retained earnings at the beginning of the year |
83,250,000 |
|
|
96,910,000 |
||
|
Dividends declared: |
||
|
On preferred stock—$6.00 per share |
$ 300,000 |
|
|
On common stock—$1.75 per share |
14,000,000 |
14,300,000 |
|
Retained earnings at the end of the year |
$82,610,000 |
At the end of the current year, Pierson Inc. has outstanding 8,000,000 shares of $10 par common stock and 50,000 shares of 6% preferred.
On April 1 of the current year, Pierson Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the casualty.
Instructions
Compute the earnings per share on common stock for the current year as it should be reported to stockholders.