Reference no: EM132342678

Owen's Operations Inc. reported the following information concerning its shareholders' equity during 2016:

• On January 1, 2016, the company had 900,000 common shares outstanding with a carrying value of $11.5 million.
• On January 1, 2016, the company also had 100,000 preferred shares outstanding.Dividends on these shares are cumulative at $5 per year.The carrying value of the preferred shares was $500,000.
• On September 30, 2016, Owen's Operations issued 200,000 common shares for $3,000,000 cash.
• Owen's Operations Inc. reported net income of $5 million for 2016.
• On January 1, 2016, the company had $2 million par value of 8% convertible bonds with interest payable on June 30 and December 31 of each year.Each $1,000 bond is convertible into 12 common shares at the option of the holder at any time before December 31, 2021.
• The company has 100,000 stock options outstanding allowing for the purchase of common shares at a price of $15 per share at any date between January 1, 2018, and December 31, 2020.
• The average market value of Owen's Operations Inc.'s common shares during 2016 was $20.
• The company pays income tax at an effective rate of 40%.
• The company paid no dividends in 2015 or 2016.

Required:

Calculate basic and diluted earnings per share for Owen's Operations Inc. for 2016.