1.Owl Co. has 200,000 common shares, 50,000 common stock options, and 20,000 shares of $100, 5% cumulative preferred stock, all of which were outstanding during 2020. The stock options exercise price is $20 and the average market price is $50 during 2020. Owl has net income of $500,000 and declared no dividends in 2020. What is basic and diluted EPS?

a.Basic EPS $2.50 & Diluted EPS $1.60

b.Basic EPS $2.50 & Diluted EPS $1.74

c.Basic EPS $2.00 & Diluted EPS $1.60

d.Basic EPS $2.50 & Diluted EPS $1.74