Name: __________________________ Problem chapter 16 1. Basic and diluted EPS. The following information was taken from the books and records of Teller, Inc.: Net Income $800,000 Capital Structure: Convertible bonds 6% $30,000 worth. Each $500 bond can be converted into 40 shares of common stock. The common stock $10 par started the year with 60,000 shares outstanding (issued 5 years ago). On April 1 there was a repurchase of 4,000 shares. On July 1, reissued 6,000 shares of treasury stock. On November 1 there was a 2 for 1 split. At the end of the year there were stock warrants outstanding (for the whole year) to purchase 25,000 shares of stock for $20 per share. The average market price for the stock is $40. The corporate income tax rate averages 40%. Instructions Compute basic and diluted earnings per share.