000 WARRANTS ARE OUTSTANDING WITH AN EXERCISE PRICE OF $24. EACH WAR...

5,000 warrants are outstanding with an exercise price of $24. Each warrant is convertible into one common share.The average market price per common share during 2004 was $20.Calculate Zany's basic and diluted earnings per share (EPS) for 2004.Basic EPS Diluted EPSغ A)$4.00 $2.86ض B)$3.30 $2.86غ C)$3.30 $2.00ExplanationBasic EPS = (net income − preferred dividends) / number of common shares = (200,000 − 35,000) / 50,000 = $3.30 per shareThe preferred shares are converted into 20,000 common shares, the firm does not pay preferred dividends. Diluted EPS =