At January1,2013 Myco Corporation had outstanding the following securities: $1,000,000, 5% cumulative convertible preferred shares,$50 par; each share is convertible into 2 shares of common stock. 7% convertible bonds, $2,000,000 face value issued at par ($1,000) per bond. Each bond is convertible into 30 shares of common stock $6,000,000 common stock, $10 par value Additional information: a. On April 1, 2013, Myco purchased 100,000 shares of its common stock as treasury stock. b. June 30, 2013, Myco issued a 4%stock dividend c. On October 31, 2013, 50,000 shares of treasury stock were sold. d. Common stock option outstanding as of 12/31/12 and exercisable in 2013 to purchase 40,000shares at an exercise price of $30 e. The market price of the stock peaked on October 31,2013 at $50 an on December 31, 2013 the market price of the stock closed at $30,; the average market price of stock during 2013 was $40 f. Net income for the year ended December 31, 2013 was $1,500,000 g. The income tax rate for 2013 was 40%.
Required:
1. Compute Myco ‘s basic earnings per share for the year ended December 31, 2013.
2. Compute Myco's diluted earnings per share for the year ended December 31, 2013.