Details of Crothers Aussie Corp.’s (CAC) capital structure during 2018 follow:

■ 300,000 ordinary shares were outstanding on January 1, 2018; 100,000 additional ordinary shares were issued on July 1, 2018. 

■ $2,000,000, 4.5% bonds maturing on December 31, 2024. The bonds were issued at par. Each $1,000 bond is convertible into 22 ordinary shares. 

■ 40,000, $100, 3% cumulative preferred shares. Dividends were last declared and paid in 2015. 

CAC’s net income for the year ended December 31, 2018, was $50,000. Its income tax rate was 18%. 

Required: 

a. Calculate CAC’s basic EPS for 2018. 

b. Are the convertible bonds dilutive or antidilutive in nature? Why? 

c. Calculate CAC’s diluted EPS for 2018.