Sea Products Corp. (SPC) reported $6,510,000 of earnings from continuing operations for the 20X4 fiscal year, and an after-tax loss from discontinued operations of $6,010,000. Preferred dividends and a common dividend of $1 per share were declared in 20X4. The average common share price was $23 during the period (adjusted for the split; see below), and the tax rate was 30%.

SPC reported the following financial instruments as part of its capital structure at the end of 20X4:

1. 5,220,000 common shares outstanding. Of these, 2,610,000 had been issued as a 2-for-1 stock split on 1 October 20X4. The terms of all share contracts were adjusted to reflect the split, and adjusted values are given in the information that follows.

2. $5,160,000 of bonds payable, convertible into 136,000 common shares beginning in 20X2 at the option of the investor. The bonds are reported as a liability, with a discount, and as an element of equity. Interest paid this year was $256,000, and there was $58,600 of discount amortization recorded.

3. 760,000 preferred shares, with a $3 per share cumulative dividend. There had been 716,000 shares outstanding at the beginning of 20X3. In January, 260,000 shares, with an average issuance price of $641,000, were retired for $731,000.

4. Options outstanding: 166,000 shares at an option price of $14, exercisable beginning in 20X7; 516,000 shares at an option price of $9, exercisable beginning in 20X2; 216,000 shares at an option price of $8, exercisable beginning in 20X3.

Required: 12 Marks

Calculate the required EPS and provide a brief explanation as to how EPS can be used by readers of the Financial Statements