A company reports net income in the current year of $600,000. During the year, the company declares and pays $20,000 in cash dividends on its common stock and $80,000 in dividends on its convertible preferred stock. The company has 20,000 shares of the preferred stock outstanding all year and each isconvertible into three shares of common stock. The company starts the year with 170,000 shares of common stock outstanding. On July 1 of that year, 20,000 additional shares of common stock were issued as a stock dividend so that the company had 190,000 shares for the last six months of the year. What should the company report as its basic earnings per share figure (rounded)?

$2.89

$2.74

$2.63

$2.78