Example 7 - Basic & Diluted EPS with Convertible Securities The capital structure and the operating results of City Ltd. are as follows: Capital structure: Issued share capital as at 31-12-2017: 5,000 ordinary shares of no par value each 1,000 10% cumulative preference shares of $5 each Trading results for year ended 31-12-2018 (Extract): 2017 2018 Profit before tax $4,000 $5,000 Less: Profits tax 500 1,000 Net profit for the year $3,500 $4,000 On 1 July 2018, City Ltd. issued 500, 8% convertible cumulative preference shares of $10 each. Each share can convert to 4 shares of ordinary shares, effective 1-1-2022. Required: Compute basic and diluted EPS for 2018. Express your answer in cents