Determine the Basic and Diluted Earnings Per Share for Company X. All necessary Information is listed below. Show your calculations. 2. In 100 words, or fewer, explain why investors should be more interested in the the Diluted EPS number than the Basic EPS number.

Company X information for Diluted Shares calculations for period 201X: Earnings for Year 201X - $20 million Average Basic shares outstanding for Company X in 201X 10 million Average Stock Price for year 201X - $6.00 Warrants to purchase common shares: - Warrants A to purchase 2 million shares ex @ $2.00 - Warrants B to purchase 3 million shares ex @ $5.00.

Assume the A and B Warrants are the only additional securities outstanding (besides the basic shares) for Company X in 201X.