96. The Dunlop Corporation reported basic EPS of $3.50 for the year ended December 31, 2018; the denominator used in the basic EPS calculation was 360,000 shares. Dunlops marginal income tax rate is 40%. Dunlap had the following convertible securities outstanding during the entire year:

8% convertible preferred stock with a total par value of $1,000,000; the preferred stock is convertible into 22,000 shares of common stock.

10% convertible bonds with a total par value of $6,000,000; the convertible bonds are convertible into 120,000 shares of common stock.

Required:

Calculate the diluted EPS. (Hint: First test each security separately for dilution.)