Use the following to answer questions 10 and 11:

Bacardi Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding for the entire year. The non-convertible preferred stock has a par value of $100 per share. Bacardi did not declare or pay any dividends during the year. Bacardi's net income for the year was $2.5 million and the income tax rate is 40%. Bacardi granted 10,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $29 per share. The market price of the common stock averaged $30 per share during the year and the stock price at the end of the year was $32 per share.

_____ 10. Basic earnings per share reported by Bacardi Inc. for the year is closest to:

A) $5.00 B) $4.40 C) $4.34 D) $4.24

_____ 11. Diluted earnings per share reported by Bacardi Inc. for the year is closest to:

A) $5.00 B) $4.40 C) $4.34 D) $4.24