Ignatius Corporation had $9$ million shares of common stock outstanding during the current calendar year. It issued twenty eight thousand, $$1,000,$ convertible bonds on January $1.$ Each bond is convertible into $50$ shares of common stock. The bonds were issued at face amount and pay interest semiannually at an annual rate of $10\%.$ On June $30,$ Ignatius issued $280,000$ shares of $$100$ par $6\%$ cumulative preferred stock. Dividends are declared and paid quarterly. Ignatius has an effective tax rate of $40\%.$ Ignatius would report the following EPS data $($rounded to $2$ decimal places$)$ on its net income of $$38$ million:

Basic EPS Diluted EPS

a$.$ $ $4\mathrm{.}32$ $ $3\mathrm{.}65$

b$.$ $ $4\mathrm{.}13$ $ $3\mathrm{.}73$

c$.$ $ $4\mathrm{.}22$ $ $3\mathrm{.}65$

d$.$ $ $4\mathrm{.}13$ $ $4\mathrm{.}00$

Multiple Choice

Option A

Option D

Option C

Option B