Assume the following facts are about a parent and its 75% owned subsidiary company:

Parent

Subsidiary

Net income$200,000

$75,000

Common shares outstanding45,000

30,000

(22,500 = 75% owned

by parent)

Convertible Preferred StockDividends = $25,000 Convertible into 5,000 shares of common stock

Convertible BondsInterest expense after tax

= $5,000

Convertible into 4,000

shares of common stock

What is the basic earnings per share?

Select one:

A.$5.14

B.$5.69

C.$6.94

D.$4.44