Problem:
DiCenta Corporation reported net income of $293,000 in 2014 and had 51,500 shares of common stock outstanding throughout the year. Also outstanding all year were 6,780 shares of cumulative preferred stock, each convertible into 2 shares of common. The preferred stock pays an annual dividend of $5 per share. DiCenta's tax rate is 39%.
Required:
Question: Compute DiCenta's 2014 diluted earnings per share.
Note: Provide support for your rationale.