S & D Company has 20,000 shares of common stock outstanding and 1,000 shares of convertible preferred stock. It has reported net income of $ 40,000. It also has 2,000 outstanding warrants all year, convertible to one share each of $25 per share. The convertible10%, $100 par value, outstanding for the entire year, is convertible to 15 shares of common stock. If the tax rate applicable is 35% and the average stock price is $36. Find the diluted EPS of the firm if the preferred stock is converted into common stock at the beginning of the year.