Net income 40,000 Shares outstanding the entire year 7,000 $6 options outstanding 3,000 Market price ` $10 Preferred shares outstanding the entire year 1,000 Dividend preferred shares $5 Each preferred share can be converted into a share of common stock 8% bonds $100,000 The bonds can be converted into 2,000 shares of stock Calculate earnings per share and diluted earnings per share.