On January 1, Oreo Inc. had 175,000 shares of common stock issued and outstanding. The company issued a 40% stock dividend on July 1. On October 1, the company purchased 20,000 shares of its common stock for the treasury, and declared a 2-for-1 stock split on December 31. The company also had 10,000 shares of 5%, $20 par value cumulative preferred stock outstanding during the year. No dividends were declared on either the preferred or the common stock during the prior year or current year. Net income for the year was $1,000,000.

Required

1. Compute basic EPS.
2. Compute basic EPS assuming instead that the company declared and paid the current year preferred dividend and one year of dividends in arrears in December.
3. Compute basic EPS assuming instead that the preferred stock is noncumulative.