1. The information below pertains to the XYZ Company for 2016.

1	Net income for the year	1,200,000
2	7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock	2,000,000
3	6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock	4,000,000
4	Common stock, $10 par value	6,000,000
5	Tax rate for the year	40%
6	Average per share market price of common stock	$25
7	There were no changes during the year in the number of common shares, preferred shares, or convertible bonds outstanding.
8	There is no treasury stock.
9	The company has common stock options (granted in a prior year to key executives) to purchase 75,000 shares of common stock at $20 per share

a. Calculate basic earnings per share (EPS) for 2016:

Display and label the details of your calculation.

b. Calculate diluted earnings per share (EPS) for 2016:

Display and label the details of your calculation.