Patty Lima, controller at Sabby Pharmaceutical Industries, a public company has provided selected financial data for the fiscal year ended December 31, 2019.

5% convertible bonds payable due 2021 (note 1) $3,000,000 (The bonds are convertible into common shares at 32 shares per $1,000 bond)

$2 convertible, cumulative Preferred Shares, no par value,

40,000 shares outstanding $1,800,000 (each preferred share is convertible into 2 common shares)

Common Shares, 1,040,000 shares outstanding at December 31, 2019

(see below for details) $3,500,000

Notes:

1. The cumulative preferred shares have not been paid dividends for 2 years.
2. Stock options were issued and provide the holders with the right to purchase 30,000 common shares at the exercise price of $15 per share. The average
3. market price per common share was $18 in 2019
4. Net income for fiscal year 2019 was $1,653,000.

REQUIRED:

a. On January 1, 2019, Sabby had 300,000 common shares outstanding. It had the following transactions in 2019 that affected common shares:

February 1 April 1 Sept 1

Issued 100,000 common shares Issued a 30% stock dividend Issued a 2 for 1 stock split

Calculate Weighted Average Common shares (WACS) with the above information. (4 marks)

b. For 2019, calculate Sabby's Basic EPS. (3 marks)

c. For 2019, calculate Sabby's Dilutive EPS. Assume a tax rate of 35%.

Show all your calculations. (5 marks)