Bragg Corporation had a net income of $2,510,000 in 2018. On January 1, 2018 there were 250,000 shares of common stock outstanding. On May 1, 30,000 common shares were issued, and a 15% stock dividend was declared on the common stocks on June 1. On October 1, Bragg bought 10,000 shares of treasury stock and on December 1, the board of directors declared a 4:1 stock split. The Board of Directors didnt declare cash dividends during the year.

During the year, 50,000 stock options that allow the employees to buy common stock at $45 per share and 40,000 stock warrants to buy common stocks at $42 per share were outstanding. The average market price of the common stock was $60 during 2018 and the tax rate was 20%.

During 2018, there were 25,000 shares of convertible, cumulative, 10% preferred stock outstanding. The preferred stock has a $100 par value and is convertible into five shares of common stock.

Bragg issued $4,000,000 of 5% convertible bonds at face value during 2017. Each $1,000 bond is convertible into 20 shares of common stock.

1. Compute the diluted earnings per share for 2018. Show and label all computations and final answer.