Given the following financial structure for Company S for all of 2017:

Common stock, $1 par value, 500,000 shares issued and outstanding all year.

Convertible preferred stock, 90,000 shares, $100 par value, 4% cumulative dividend, each share convertible into 3 shares of common stock.

Convertible bonds, $500,000 face value, 6% stated rate, each $1,000 bond is convertible into 20 shares of common stock.

Stock options - 200,000 options outstanding, each option convertible for one share of stock at an option price of $40 per share.

Additional information for 2017:

1. The convertible bonds were issued at par in 2015.

2. The average market price per share for the common stock was $50 in 2017.

3. The income tax rate for Company S is 30 percent.

4. Net income for Company S for 2017 was $1,200,000.

A. (3 points) On the answer sheet, calculate Basic EPS (carry calculations to 2 decimal places).

B. (6 points) On the answer sheet, show your calculations for the numerator and denominator effect of each of the above convertible securities. (This part of the answer sheet will allow me to give partial credit, even if you result is wrong.)

C. (1 point) From your calculations in Part B, complete the schedule to calculate the dilution index of each convertible security, then indicate the ranking (most dilutive = 1) of each convertible security.

D. (4 points) Using the indexes above to incrementally evaluate the dilutive effect, calculate diluted earnings per share in the space provided on the answer sheet. Show the DEPS calculation at each