4. Selected information for Suzie's Cat Corral (SCC) follows: Capital Structure as at January 1, 2016 200,000 common shares issued and outstanding 20,000 $100 cumulative preferred Class A shares with a stated dividend rate of 3% per year; at the option of the holder, each preferred share can be exchanged for one common share on or before December 31, 2019 100,000 non-cumulative Class B shares that are each entitled to dividends of $4 per year Series A bonds - $2,000,000 of 5%, semi-annual bonds, issued at par, maturing September 30, 2019; at the option of the holder, each $1,000 bond can be converted into 10 common shares at any time before maturity. Series B bonds - $1,000,000 of 4%, semi-annual bonds, issued at par, maturing December 31, 2019; at the option of the holder, each $1,000 bond can be converted into 12 common shares at any time before maturity During the year, transactions affecting SCC's outstanding common shares were as follows: March 1: repurchased 30,000 common shares and immediately cancelled them. September 1: issued (sold) 20,000 common shares October 1: declared a 2-for-1 stock split Other pertinent information: SCC's corporate tax rate is 20% After-tax profit for the year ended December 31, 2016 was $1,200,000 During the year, cash dividends were neither declared nor paid. Required a) Calculate SCC's basic EPS for the year ended December 31, 2016. b) Prepare a table that indicates the income effect, share effect, and incremental EPS for each potential common share. Order the items from most dilutive to least dilutive. c) Calculate SCC's diluted EPSs for the year ended December 31, 2016. 4. Selected information for Suzie's Cat Corral (SCC) follows: Capital Structure as at January 1, 2016 200,000 common shares issued and outstanding 20,000 $100 cumulative preferred Class A shares with a stated dividend rate of 3% per year; at the option of the holder, each preferred share can be exchanged for one common share on or before December 31, 2019 100,000 non-cumulative Class B shares that are each entitled to dividends of $4 per year Series A bonds - $2,000,000 of 5%, semi-annual bonds, issued at par, maturing September 30, 2019; at the option of the holder, each $1,000 bond can be converted into 10 common shares at any time before maturity. Series B bonds - $1,000,000 of 4%, semi-annual bonds, issued at par, maturing December 31, 2019; at the option of the holder, each $1,000 bond can be converted into 12 common shares at any time before maturity During the year, transactions affecting SCC's outstanding common shares were as follows: March 1: repurchased 30,000 common shares and immediately cancelled them. September 1: issued (sold) 20,000 common shares October 1: declared a 2-for-1 stock split Other pertinent information: SCC's corporate tax rate is 20% After-tax profit for the year ended December 31, 2016 was $1,200,000 During the year, cash dividends were neither declared nor paid. Required a) Calculate SCC's basic EPS for the year ended December 31, 2016. b) Prepare a table that indicates the income effect, share effect, and incremental EPS for each potential common share. Order the items from most dilutive to least dilutive. c) Calculate SCC's diluted EPSs for the year ended December 31, 2016