On January 1, 2017, Cheyenne Company issued 10-year, $2,020,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Cheyenne common stock. Cheyennes net income in 2017 was $317,000, and its tax rate was 40%. The company had 97,000 shares of common stock outstanding throughout 2017. None of the bonds were converted in 2017.

A. Compute diluted earnings per share for 2017.

Please explain, I have the answer as 3.0396- but its wrong and I cannot figure out why.