Information concerning the capital structure of Shepherd Corporation follows

Question 1:

December 31,

2020 2019

Common shares outstanding 100,000 shares 100,000 shares

Convertible preferred shares outstanding 10,000 shares 10,000 shares

9% convertible bonds $ 2,000,000 $ 2,000,000

During 2020, Shepherd paid dividends of $ 1.00 per common share and $ 2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2020 was $ 500,000. Assume the income tax rate is 30%. Basic earnings per share for 2020 is