Reference no: EM132846548

Question - Throughout 2014, H had 2,000,000 shares of common stock issued and outstanding and 100,000 shares of 5%, $100 par value cumulative preferred stock issued and outstanding. H's net income for 2014 was $8,782,000. During 2014 H neither declared nor paid any kind of dividend. H's income tax rate is 20%.

During the entire year ending 12-31-14, H had 100,000 outstanding and exercisable employee stock options that were granted to employees during 2013. Each option has an exercise price of $25 per share of H common stock. During 2014, the average market price of H's common stock was $40 per share.

As of 12-31-14, H had $1,000,000 of 6%, 15-year convertible bonds. H issued the bonds at par during 2005. The bonds can be converted into 100,000 shares of H's common stock.

As of 12-31-14, H had $50,000,000 of 8%, 40-year convertible bonds. H issued the bonds at par during 1995. The bonds can be converted into 400,000 shares of H's common stock.

Required -

What will H report as basic EPS for the year ended 12-31-14? ROUND TO NEAREST PENNY.

What will H report as diluted EPS for the year ended 12-31-14? ROUND TO NEAREST PENNY.