Assume a company had net income of $20,000 and 8,000 common shares were outstanding the entire year. Also assume there were 2 convertible securities outstanding the entire year:

Dilution testing showed the following changes in the EPS numerator and denominator for two convertible securities if they had been converted:

Earnings Available to Common Shareholders

Weighted Average Common Shares

#1

$8,000

6,000

#2

12,000

5,000

What is the diluted EPS? (Rounded to the nearest cent)

Group of answer choices

$2.00

$2.50

$2.40

$2.11