(EPS: Simple Capital Structure) A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows. Note 1 during the year, Pierson Inc. suffered a major casualty loss of $1,340,000 after applicable income tax reduction of $1,200,000. 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. Compute the earnings per share on common stock for the current year as it should be reported to stockholders.

Income before extraordinary item Extraordinary loss, net of applicable income tax (Note 1) Net income Retained earnings at the beginning of the year Dividends declared: On preferred stock-$6.00 per share On common stock-$1.75 per share Retained earnings at the end of the year $ 300,000 14,875,000 $15,000,000 1,340,000 13,660,000 83,250,000 96,910,000 15,175,000 $81,735,000