Selected information for Webster Corporation at December 31, 20x8, is presented below:

Long-term debt:

Notes payable, 14% ……………………………………………………... $1,000,000

8% convertible bonds payable ………………………………………..… 2,500,000

10% convertible bonds payable ………………………………….…..… 2,500,000

Total …………………………………………………………………….…. 6,000,000

Stockholders’ equity:

10% cumulative preferred stock, par value $100;

100,000 shares authorized, 25,000 shares issued

And outstanding ……………………………………………….….. $2,500,000

Common stock, par $1, 5,000,000 shares authorized,

625,000 shares issue, 600,000 outstanding ………………….... 625,000

Additional paid-in capital ……………………………………………………. 2,000,000

Retained earnings ………………………………………………….……..…. 9,000,000

Treasury stock ……………………………………………………………..... (725,000)

Total ………………………………………………………………….…….. $13,400,000

The following additional information is available:

A chronology of common stock activity for 20x8 is as follows:

1/1 ……. 400,000 shares outstanding

4/1 ……. 125,000 shares issued

8/1 ……. 25,000 shares purchased for the treasury

11/1 …... 100,000 shares issued

-Options were granted in July 20x6 to purchase 50,000 shares of common stock at $20 per share. The average market price of Webster’s common stock during 20x8 was $30 per share.

-Both the 8% and 10% convertible bonds were issued in 20x7 at par. Each $1,000 convertible bond is convertible into 40 shares of common stock.

-The 10% cumulative, convertible preferred stock was issued at the beginning of 20x8 at par. Each share of preferred is convertible into 4 shares of common stock.

-The average tax rate is 40%.

-Preferred dividends were not declared in 20x8.

-Net income was $1,750,000 in 20x8.

-No bonds or preferred stock were converted during 20x8.

Calculate basic and diluted earnings per share for 20x8.