ACC 304 EPS In-Class Problem 3 On January 1, 2017, Loyola Enterprises had outstanding 800,000 common shares (par $1) that originally sold for $10 per share, and 12,000 shares of 8% cumulative preferred stock (par $100), each convertible into 12 shares of common stock. On March 1, 2017, Loyola Enterprises issued 40,000 shares of common stock at S40 and had a second offering on August 1, 2017 when it sold 20,000 shares of common stock at $42. At December 31, 2017, there were also $600,000 of 8% convertible bonds outstanding (issued at face value), each $1,000 bond convertible into 20 shares of common stock. The 8% bonds were issued in 2011. Additionally, at the close of the year, there were common stock options outstanding, issued in 2016 and exercisable for 30,000 shares of common stock at an exercise price of $20. The market price of the common stock at year end was $50. During the year, the price of the common stock averaged $43 per share. Net income was $1,400,000 and the tax rate for the year was 35%. Required: Compute Basic and Diluted EPS for the year ended December 31 2017