I am having a problem trying to figure out how to start this problem, because the Basic EPS formula in my book requires the preferred stock and it is not given. The question is pasted below...any advice of where to start would be great. Thank You. Ace company's net income for the year is $4 million and the number of common shares outstanding is 3 million (there is no change in shares outstanding during the year). Ace has options and warrants outstanding to purchase 1 million common shares at $15 per share. Required: a.If the average market value of common share is $20, year end price is $25, interest rate on borrowings is 6%, and the tax rate is 50%, then compute both basic and diluted EPS b.Do the same computation as in a assuming net income for the year is only $3 million, the average market value per common share is $18, and year end price $20 per share. Check: (b) Diluted EPS, $0.95