Industries had outstanding 780.000 common shares ($1 par) that originally sold for $30 per share, and On January 1, 2018, Tonge 9000 shares of cumulative preferred stock ($100 par), convertible into 90,000 common shares. 7 On October 1,2018, Tonge sold and issued an additional 16,000 shares of common stock at $34. At December 31, 2018, there were 28,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 28,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end was $48. During the year, the price of the common shares had averaged $40. Net income was $920,000. The tax rate for the year was 40%