1. You have the following information about Spring Forward Inc. (SFI) for 2022. The company has a calendar year end and a 25% tax rate.

• SFI recorded net income of $500,000 in the year
• The companys capital structure consists of the following:
  • Common shares, 100,000 outstanding throughout the year$900,000
  • Convertible 7% bonds. Each of the 400, $1,000 bonds is convertible into 50 common shares..$400,000
  • $9 convertible, cumulative preferred shares. 5,000 shares issued and outstanding. Each preferred share is convertible into two common shares$500,000
• No bonds or shares were converted during 2022.

Required (13 marks):

1. Calculate basic and diluted earnings per share for 2022 assuming that no dividends were declared.
2. State whether SFI has a complex or simple structure and explain why.