1. A company has 15,000 shares of common stock outstanding all year. There are 7000 shares of $4 preferred stock. Each share is convertible into 5 shares of common stock. Dividends were declared. Net income is $38,000. The tax rate is 20%. Basic and diluted eps are respectively

1. $.67 and $.76
2. $1.04 and $.67
3. $.67 and $.67
4. $1.04 and $.20