a. Compute weighted-average number of common shares outstanding for the year. b. Compute basic EPS. c. Compute diluted EPS considering preferred shares and options.

Common stock: shares outstanding Balance on January 1 April 1 - issued in conversion of preferred stock July 1 - sold for cash Balance on December 31 500,000 200,000 100,000 800,000 Preferred stock: shares outstanding $10 par 8%, each convertible into two common shares Shares outstanding, January 1 Converted on April 1 (into 200,000 common) Shares outstanding at year-end 175,000 100,000 75,000 Options 100,000 options each to purchase one common share at $80 per share. None have been exercised. Additional information: End of Year $86 Market prices of common stock for Year Preferred dividends paid in year Net income Average for Year $84 $80,000 $1,200,000