Problem D-7 Basic and Diluted Earnings per Share The following data relate to Schroeder Lid. for the calendar year 2017: Net income (30% tax rate). $3,250,000 Average number of common shares outstanding during 2017... 1,200,000 shares 8%, cumulative convertible preferred shares: convertible into 90,000 common shares...... mmm. $1,800,000 6% convertible bonds; convertible into 60,000 $2,000,000 Stock options, exercisable at $30 per share..... 105,000 shares All the convertible securities and stock options were outstanding all year. The average market price of the common shares in 2017 was $35. Instructions Calculate: a. basic earnings per share b. diluted earnings per share