Question - Rancho, Inc. had 95 million shares of common stock, 1 million shares of 6%, $100 par, cumulative preferred stock, and 1 million shares of 8%, $100 par, noncumulative preferred stock outstanding at the end of 2012 and 2013. No dividends were declared or paid on common stock in either year. In 2013, a $3 million dividend was paid on the 6% preferred stock and a $4 million dividend was paid on the 8% preferred stock. Net income for 2013 was $400 million. The company's tax rate is 30%.
Required: Compute basic earnings per share (rounded to 2 decimal places) for the year ended December 31, 2013. You must show how you calculated the number for credit.