TheShamrockCorporation issued 10-year, $5,390,000par,7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is13:1, and in 2 years it will increase to16:1. At the date of issue, the bonds were sold at97. Bond discount is amortized on a straight-line basis.Shamrock's effective tax was40%. Net income in 2017 was $10,350,000, and the company had2,170,000shares outstanding during the entire year.

(a)Compute both basic and diluted earnings per share.