The following data are presented by Washperson Ltd. for calendar 2014:

Net income

Common shares outstanding, 1,000,000 shares

10%, $ 100 par value cumulative preferred shares, convertible into 120,000 common shares

8% convertible bonds; convertible into 105,000 common shares

4.000.000 stock options exercisable at $20 per share

$4.500,000

$15,000,000

$1.600,000

$7.500,000

Additional information:

1. The common and preferred shares and stock options were outstanding all year. The convertible bonds were outstanding from July 1, 2014.
2. in 2014, a $500,000 dividend was declared and distributed, however, no dividends were declared in 2012 or 2013.
3. The average market price of the common shares in 2014 was $80. The stock price was $27 on January 1, 2014, and $135 on December 31, 2014.
4. The convertible bonds were issued when the market rate was 6%. The bonds require annual interest payments and sold at a premium. During the year the amortization of the preium was $56044.
5. The income tax rate for 2014 is 30%.

Instructions

1. Calculate basic EPS.
2. Calculate diluted EPS.

Additional information: 1. The common and preferred shares and stock options were outstanding all year. The convertible bonds were outstanding from July 1, 2014. 2. In 2014, a $500.000 dividend was declared and distributed, however, no dividends were declared in 2012 or 2013. 3. The average market price of the common shares in 2014 was $80. The stock price was $27 on Jaruary 1,2014, and \$135 on December 31, 2014. 4. The convertible bonds were issued when the market rate was 6%. The bonds require annual interest payments and sold at a premium. During the year the amortization of the premium was $56,044. 5. The income tax rate for 2014 is 30%. Instructions a. Calculate basic EPS. b. Calculate diluted EPS