East Carbon Company had 100,000 shares of common stock outstanding throughout the year. In addition, as of January 1, the company had issued 10,000 convertible preferred shares (5%, $100 par). The company has no other potentially dilutive securities. The preferred shares were NOT converted during the year. Net income for the year was $200,000. Compute DILUTED earnings per share, assuming that each preferred share was convertible into four shares of common stock