In 2016 ABC Company issued, at par, $2,500,000 of 8% convertible bonds and $1,600,000 of 10% cumulative convertible preferred stock. In total, the bonds are convertible into 75,000 shares of common stock and the preferred stock is convertible into 55,000 shares of common stock. ABC reported net income of $3,000,000 for 2016. Throughout 2016, 1,000,000 shares of common stock were outstanding and none of the bonds or preferred shares were converted or redeemed. (Assume a tax rate of 30%).

Calculate basic EPS for 2016

Calculate diluted EPS for 2016