a)weighted-average shares outstanding for 2015.

= (670000*2)*(2/12) = (602,800*2)*(3/12) + 1,205,600*(5/12) + 1,433,600*(2/12)

= 1266000

b)Basic EPS for 2015 = Net Income-preferred dividend/ weighted-average shares

outstanding
= (2800000-84000)/1266000
= 2.15 per share
c)
Incremental EPS in Case of Preference Share Conversion = (1050000*8%)/210000
= 0.40 per share --------------2nd Rank
.
Note:-Assuming Conversion ratio = 1:1
..
..
Incremental EPS in Case of Options Conversion = 0/Free no. of Shares
= 0/15000
= 0 per share --------- 1st rank
.
Note:Free no.of shares in Options =90000 - (90000*25)/30
= 15000 shares
Dilution Test:After adjusting options:EPS = (2800000+0)/(1266000+15000)
= 2.19 per share
..
After Adjusting preference shares:EPS = (2800000+84000)/(1266000+15000+210000)
= 1.93 per share
..
Both the Instruments are dilutive.
,,
Therefore, Diluted EPS = 1.93 per share
..