• During 2021 Farewell Inc has 501,000 shares Of common stock and 50,500 shares of 5% cumulative preferred stock outstanding. The preferred stock has par value of $100 per share. Farewell did not declare or pay any dividends in 2021.
• Farewells net income for the ended December 31, 2021 was 2.6 million. The income tax rate is 20%. Farewells granted 11,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $30 per share. The options vest agree one year. The market price of the common stock averaged $31 per share during 2021.
• What is farewells basic and diluted earnings per share?