XYZ Company Ltd has 1,000,000 $1 ordinary shares and 1,000 $100 10% convertible bonds to be issued at par value. Each bond is convertible to 20 ordinary shares on demand, all of which have been in issue for the whole of the reporting period. XYZ Company Ltd's share price is $4.50 per share and earnings for the period are $500,000. The tax rate applicable to the entity is 21%.
(a) What is the basic earnings per share?
(b) What is the diluted earnings per share?