On January 1, 2013, Belk, Inc. had outstanding 440,000 common shares (par $1) that originally sold for $20 per share, and 4,000 shares of 10% cumulative preferred stock (par $100), convertible into 40,000 common shares. On October 1, 2013, Belk issued an additional 16,000 shares of common stock at $33. At December 31, 2013, there were common stock options outstanding, issued in 2012, and exercisable for 20,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end was $48. During the year the price of the common shares had averaged $40. Net Income was $650,000. The tax rate for the year was 40%. Compute basic and diluted EPS for the year ended December 31, 2013.