The following information pertains to Petit Four Inc. Net income $548,000 5% Convertible bonds issued at par $225,000 Weighted-average shares outstanding 188,000 Tax rate 25% Each $1,000 bond is convertible into 20 shares of common stock at the option of the bondholder. The bonds were outstanding all year. The company computes diluted EPS using the if-converted method.

Calculate basic and diluted EPS for the year assuming that the convertible bonds were issued on November 1.

$2.91 $2.80

$2.91 $2.89

$2.91 $2.91

$2.19 $2.19