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During Year 3, independent transactions occurred that affected Company A's Year 3 basic earnings per share (BEPS) and diluted earnings per share (DEPS). Assume that the company's BEPS for Year 3, before considering the effects of the transactions presented below, is $2. The company's effective tax rate is 40%.

Select from the option lists provided the appropriate effect on Company A's BEPS and DEPS for each independent transaction below. Each choice may be used once, more than once, or not at all.

Transaction	BEPS	DEPS
On July 1, Year 3, the company issued 1,000 common shares for $1,000 in cash and repurchased 1,200 common shares on September 30, Year 3, for $1,200.
On December 31, Year 3, 2,000 of the company's stock options that were issued during Year 1 were exercised for 2,000 of the company's common shares. The exercise price of each share option is $10, and the average market price of the company's common shares for Year 3 was $8 per share.
On May 1, Year 3, the company issued $5,000 of par value, noncumulative 6% preferred shares that are convertible into 2,000 common shares.

Options: INCREASE, DECREASE, NO EFFECT