4. Lancaster Inc.'s fiscal year runs from January 1st to December 31. The firm began the year 2017 with a total of 800,000 shares outstanding. On April 1, 2017, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on December 31, 2017. Lancaster Inc. also issued $600,000 of 20 -year 8% convertible bonds at par on July 1, 2017. Each bond has a par value of $1,000 and converts to 40 shares of common stock. None of the bonds have been converted to date. The firm had net income of $1,540,000 and the tax rate is 40%. Calculate the firm's basic EPS and diluted EPS for 2017. Hint: When calculating DEPS, the interest expense "saved" by the firm when the bonds are converted is half a year's worth of interest, and the new shares are only outstanding for half a year because the bonds were issued on 1 July