Refer to the information in T20-2. Assume that Hominem Inc. had a loss on discontinued operations of $1,000,000 (after tax).

Data From T20-2

Hominem Inc. has 100,000 common shares outstanding. Earnings from continuing operations amounted to $1,500,000 (after tax) for the year ended 31 December 20X4. Hominem’s income tax rate is 25%. The company had no discontinued operations. At the end of 20X4, the market price of the company’s common shares was $27. Hominem had these additional components in its capital structure at the end of the year:
• 15,000 cumulative preferred shares outstanding since 20X2; each share is entitled to an annual dividend of $20 per share and is convertible into five shares of common after 30 June 20X9.
• 4% debentures amounting to $500,000 were issued on 1 January 20X4. On this issue date, the bonds were recorded at $425,000. The debentures are convertible into 12 shares per $1,000. On 1 January 20X4, similar bonds with no conversion options had a market yield of 6%. Interest is payable annually.
• Outstanding options permitting the holder to buy 5,000 common shares in 20X6 or later for $35 per share.

Required:
Compute diluted EPS.