Convertible Preferred Stock Charter Company earned net income of $48,000 for the year. The company had 10,000 shares of common stock outstanding during the year and 1,000 shares of noncumulative preferred stock, each convertible into 5 shares of common stock with $10 par value per share. The tax rate is 25%. During the year, Charter Company declared and paid $5,000 in preferred dividends. The company had no common stock dividends.

 a. Compute basic earnings per share. 

b. Compute diluted earnings per share. Note: Enter the earnings per share amounts in dollars and cents, rounded to the nearest penny