ABC Inc. issued a 5-year convertible bond (non-amortizing debt) on June 30, 2016. The bond has a 3% stated interest rate and interest payments are due semi-annually. The principal amount is $2000. For every $1000 in principal, a bond holder has the option to redeem the bond for 30 shares. The companys market discount rate is 10%. There were no issuance costs. On the date that the bonds were issued, the companys common stock had a market price of $35 per share.

Date	Item	Debit	Credit
June 30, 2016	Cash	1459
	Discount on bonds payable	541
	Bonds payable		2000
December 31, 2016	Interest expense	73
	Discount on bonds payable		43
	Cash		30
June 30, 2017	Interest expense	75
	Discount on bonds payable		45
	Cash		30

[Use the information from (I.1) and (I.2).] On June 30, 2017, immediately after making the second interest payment, ABC Inc. sold 30 shares of stock at $60 per share and used the proceeds to buy back the convertible bonds. The companys common stock has a par value of $1 per share.

Date	Item	Debit	Credit
Sale of shares	Cash	1800
	Common stock at par		30
	Additional paid-in capital		1770
Repurchase of bonds	Bonds payable	2000
	Loss on repurchase of bonds	253
	Discount on bonds payable		453
	Cash		1800

4. [Use the information from (I.1), (I.2), and (I.3).] In 2017, ABC Inc. reported net income of $700 and the companys statutory tax rate was 20%. The company began the year with 100 shares outstanding. The company did not buy back any shares of common stock during the year and did not issue any shares of common stock other than those associated with redeeming the convertible bond. The company did not have any in-the-money stock options outstanding or other convertible debt outstanding.

1. What was basic earnings per share in 2017? Round to the nearest penny.

What was diluted earnings per share in 2017?