The financial data below should be used to answer the following two questions.

1. Basic earnings per share for Year 7 is (choose one of the following):

a. $2.41

c. $2.60

b. $2.57

d. $2.50 2. Diluted earnings per share for Year 7 is (choose one of the following):

a. $2.43

c. $2.54

b. $2.55

d. $2.60

WRESTLING FEDERATION OF AMERICA, INC. Capital Structure and Earnings for Year 7 Number of common shares outstanding on December 31, Year 7.. 2,700,000 Number of common shares outstanding during Year 7 (weighted average) 2,500,000 Market price per common share on December 31, Year 7. 25 Weighted-average market price per share during Year 7 20 Options outstanding during Year 7: Number of shares issuable on exercise of options Exercise price... 200,000 15 Convertible bonds outstanding (December 31, Year 3, issue date): Number of convertible bonds... Shares of common issuable on conversion (per bond) Coupon rate...... Proceeds per bond at issue (at par value) Net income for Year 7 Tax rate for Year 7.. 10,000 10 5.0% 1,000 $6,500,000 40.0%