During 2016, Choco has 450,000 shares of $1 par common stock and 20,000 shares of 6%, $10 par preferred stock outstanding. The preferred stock does not have cumulative or convertibility features.

Choco declared and paid cash dividends of $220,000 during 2016.

9/1/2016, 60,000 shares of common stock were reacquired as a treasury stock.

Executive stock options granted in 2010, exercisable after 2015 for 100,000 common shares at an exercise price of $15 (the average market price of the common stock during 2016 was $20/share)

On 1/1/2014, Choco issued $2,000,000 of convertible 5% bonds at a face value. Each $1,000 bond is convertible into 5 common shares in 2016.

Chocos net income for the year ended 12/31/2016 was $916,000.

The income tax rate is 40%.

a. Calculate basic EPS in 12/31/2016. (round your number to the nearest cents)

b. Calculate diluted EPS in 12/31/2016. (round your number to the nearest cents)