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Graham, Inc. began 2020 with 24,000 common shares outstanding and issued a 20% stock
dividend on August 1. The company issued 6,000 shares on December 1. Graham also has
16,000 shares of 8%, $20 par, cumulative preferred stock outstanding on which no dividends
have been paid during either 2019 or 2020. Net income for 2020 was $176,000. Required:
Compute Graham, Inc.'s basic earnings per share for 2020. If required, round your answer to two
decimal places.

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