The R Company had a net income of $700,000 for the year, and 100,000 shares of common stock outstanding. R did not have any preferred stock outstanding. The Company had 10,000 stock options outstanding. The exercise price of each option is $8. The average market price of common stock for the year was $15 a share, and the year-end market price was $20 a share. What is the diluted earnings per share?