Exercise 1-10

A company earned net income of $705,000 during the year. It had 9,000 shares of 8%, $10 par cumulative preferred stock outstanding for the entire year. The company did not declare and pay a preferred dividend during the current year. It had 100,000 shares of common stock outstanding throughout the year.

Compute basic earnings per share for the year. (Round your answer to the nearest cent, or hundredth place, if necessary.)