COMPUTING DILUTED EARNINGS PER SHARE WITH MULTIPLE POTENTIAL COMMON SHARES Anderson Corporation Net income after tax and before conversion or exercise 4,123,580$ Weighted average common shares beginning of year before conversion or exercise 489,000 Total par value convertible bonds 3,000,000$ Stated & market interest rate on bonds 3.50% The total number of common shares that the bonds are convertible into 37,000 Issued March 1 of the current year Total shares of cumulative preferred stock 187,450 Par value per preferred share 2.00$ Dividend rate as a % par value 6.0% The total number of common shares that the preferred stock is convertible into 187,450 Outstanding as of the beginning of the year . Total stock options available to be exercised 75,000 Exercise price of warrants 98.00$ Market price of common shares 102.00$ Issued October 1 of the current year Tax rate 20%

3.) Compute the foregone interest expense AFTER TAX on the convertible bonds.

7.) Compute the incremental increase in the number of shares outstanding for the stock options.

10.) Compute diluted earnings per share. Round to two decimal places.