Use the following information to answer the next five parts to question.

The following information is also provided:

The income tax rate is 40%.

The common stock was outstanding for all of 2010.

Net income was $1,750,000 for 2010.

No bonds or preferred stock were converted during 2010.

1. Using initial information provided above, basic EPS is closest to

$2.50

$3.00

$3.50

$4.00

2. Use initial information provided above and assume the following issue also exists.

Options were granted in July of 2009 to purchase 50,000 shares of common stock at $20 per share. The average market price of Blue Jays common stock during 2010 was $30 per share. All of the options are still outstanding.

Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

3. Use initial information provided and assume the following issue also exists. (For this question, ignore the options mentioned in the previous question.)

$2,500,000 in convertible bonds payable exist bearing an 8% coupon and a par value of $1,000 per bond. The convertible bonds were issued at the beginning of 2010 at face value. Each bond has a face value of $1,000 and is convertible into 40 shares of common stock.

Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

4. Use the initial information provided above and assume the following issue also exists. (For this question, ignore the options and convertible bonds mentioned in the previous two questions.)

$2,500,000 in convertible, 10% cumulative, $100 par value preferred stock is outstanding. The convertible preferred stock was issued at the end of 2008 at par. Each share of preferred stock is convertible into 4 shares of common stock.

Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

5. Use initial information provided above and assume the following issues also exist.

Options were granted in July of 2009 to purchase 50,000 shares of common stock at $20 per share. The average market price of Blue Jays common stock during 2010 was $30 per share. All of the options are still outstanding.

$2,500,000 in convertible bonds payable exist bearing an 8% coupon and a par value of $1,000 per bond. The convertible bonds were issued at the beginning of 2010 at face value. Each bond has a face value of $1,000 and is convertible into 40 shares of common stock.

$2,500,000 in convertible, 10% cumulative, $100 par value preferred stock is outstanding. The convertible preferred stock was issued at the end of 2008 at par. Each share of preferred stock is convertible into 4 shares of common stock.

Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00