During 2021, Falwell Inc. had 670,000 shares of common stock and 67,000 shares of 9% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Falwell did not declare or pay any dividends during 2021. Falwell's net income for the year ended December 31, 2021, was $4.2 million. The income tax rate is 25%. Falwell granted 18,500 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 37 shares of common stock at an exercise price of $46 per share. The options vest after one year. The market price of the common stock averaged $47 per share during 2021. What is Falwell's basic earnings per share for 2021, rounded to the nearest cent?

a. $8.12.

b. $3.62.

c. $5.37.

d. None of these answer choices are correct.