Del Conte Construction Company has experienced generally steady growth since its inception in 1973 . Management is proud of its record of having maintained or increased its earnings per share in each year of its existence. The economic downturn has led to disturbing dips in revenues the past two years. Despite concerted cost-cutting efforts, profits have declined in each of the two previous years. Net income in 2019, 2020, and 2021 was as follows: A major shareholder has hired you to provide advice on whether to continue her present investment position or to curtail that position. Of particular concern is the declinina profitability, despite the fact that earnings per share has continued a pattern of growth: She specifically asks you to explain this apparent paradox. During the course of your investigation you discover the following events: - For the decade ending December 31, 2018, Del Conte had 60 million common shares and 20 million shares of 8%,$10 par nonconvertible preferred stock outstanding. Cash dividends have been paid quarterly on both. - On July 1, 2020, half the preferred shares were retired in the open market. The remaining shares were retired on December 30 , 2020 - $55 million of 8% nonconvertible bonds were issued at the beginning of 2021 , and a portion of the proceeds were used to call and retire $50 million of 8% debentures (outstanding since 2016) that were convertible into 9 million common shares. - In 2019, management announced a share repurchase plan by which up to 24 million common shares would be retired. 12 million shares were retired on March 1 of both 2020 and 2021. - Del Conte's income tax rate is 25% and has been for the last several years. Required: When explaining the apparent paradox to which your client refers you should indicate that, atthough net income decilined during the period, a combination of events caused EPS to increase in spite of declining profits. Those events include: Required: When explaining the apparent paradox to which your client refers you should indicate that, although net income declined during the period, a combination of events caused EPS to increase in spite of declining profits. Those events include: Retiring the preferred shares decreased earnings available to common sharcholders and retiring common shares decreased the weighted-average number of common shares. Retiring the common shares decreased the weighted-average number of common shares and retiring convertible debt increased the weighted-average number of common shares. Retiring the preferred shares increased earnings available to common shareholders and retiring retiring convertible debt decreased the weighted-average number of common shares. Retiring the common shares and retiring convertible debt each increased the weighted-average number of common shares