Bridger Bridger Stamping began the current year with 420,000 common shares outstanding and issued an additional 360,000 shares on September 1. The firm has

$11,300,000, 1.5% convertible bonds on June 30 (i.e.,$169,500 coupon interest annually), which are convertible into 326,000 shares of common stock. The firm issued the bonds at par and did not convert any during the current year. It also had $1,160,000 par value, 5% nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a 40% effective tax rate and net income is $4,400,000. Based on this information, compute basic and diluted earnings per share for the current year. Calculate the basic earnings per share (EPS) for the current year. (Round the EPS to the nearest cent, $X.XX.)

Basic EPS for the current year $2.08 (wrong answer) $8.04 (Correct answer)

Diluted EPS for the current year is $6.25