Sven's Great Grilled Cheese and Super Soup is a popular, publicly traded fast-food restaurant with locations throughout Europe. They had 200,000 common shares outstanding for the entire year. They also had 50,000 preferred shares that are convertible into 100,000 common shares. No conversions were made this year. Out of net income of €4 million, Sven's paid €1 million to preferred shareholders. The rest is available to ordinary equity holders. Calculate basic and diluted EPS.

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Basic EPS = Net income available to common shareholders / Number of common shares outstanding = €3 million / 200,000 shares = €15.00Diluted EPS = Net income available to common shareholders / (Number of common shares outstanding + Number of common shares that could be issued upon conversion of preferred shares) = €3 million / (200,000 shares + 100,000 shares) = €13.33

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