On December 31, 2020, Martin Company had outstanding 450,000 shares of common stock and 42,000 shares of 8% cumulative preferred stock (par $10). On March 31, 2021, the preferred stock was convertible into 30,000 shares of common stock. Martin issued an additional 32,000 shares of common stock. A 10% stock dividend was declared and distributed on August 1, 2021. On October 1, 2021, 8,000 shares were retired. At year-end, there were fully vested incentive stock options outstanding for 30,000 shares of common stock (adjusted for the stock dividend). The exercise price was $17. The market price of the common stock averaged $20 during the year. Also outstanding were $1,000,000 face amount of 10% convertible bonds issued in 2018 and convertible into 50,000 common shares (adjusted for the stock dividend). Net income was $850,000. The tax rate for the year was 25%.

Required:

Compute basic and diluted EPS (rounded to 2 decimal places) for the year ended December 31, 2021. Please show all work and calculations.