E16-19B (EPS: Simple Capital Structure) Selected financial information of Gray Plains Inc. for the current

year follows.

Income before extraordinary item $ 53,500,000

Extraordinary gain, net of applicable

income tax 6,250,000

Net income 59,750,000

Retained earnings at the beginning of the year 268,450,000

328,200,000

Dividends declared:

On preferred stock $ 2,000,000

On common stock$1 per share 21,500,000 23,500,000

Retained earnings at the end of the year $304,700,000

Note 1. During the year, Gray Plains Inc. took advantage of the current interest rates and called

$125 million of long-term debt. The early retirement resulted in a gain of $10,000,000 before

applicable taxes of $3,750,000.

At the end of the current year, Gray Plains Inc. has outstanding 21,500,000 shares of $1 par common

stock and 200,000 shares of 10%, $100 par preferred. There were no changes in shares outstanding during

the year.

Instructions

Compute the earnings per share on common stock for the current year as it should be reported to stockholders.