Question 1 (16 points) EPS (Recommended Time Allocation: 25 Minutes. 16 Marks.) Quentin The following data are presented by Quentin Corp. for calendar 2020 $4.500.000 6 Net income Common shares outstanding, 1,000,000 shares 10%, cumulative preferred shares, convertible into 120,000 common shares 8% convertible bonds; convertible into 105,000 common shares 360,000 call options exercisable at $ 25 per share $1,600,000 $7,500,000 12 Additional information 1. The common and preferred shares and the convertible bonds were outstanding from the beginning of the year. 2. In 2020, a $ 500,000 dividend was declared and distributed; however, no dividends were declared in 2019 3. The average market price of the common shares in 2020 was $ 30. The stock price was $ 27 on January 1, 2020, and $ 35 on December 31, 2020. 4. The convertible bonds were sold at par. 5. The income tax rate for 2020 is 30%. The enacted tax rate for 2021 is 33%. 5 Instructions a) Calculate basic EPS. b) Calculate diluted EPS c) Briefly discuss the usefulness of the EPS measure in general. What is the additional importance of reporting diluted EPS