During the entire year, 2019, Krown Company, Inc., had 200,000 common shares issued and outstanding. It also had $3 convertible cumulative preferred shares, and $1,500,000 of 10% convertible bonds outstanding. Three preferred shares are convertible into four common shares. During 2019, Krown declared dividends of $1.20 per share on the common shares and $3.00 per share on the preferred shares for the dividends of 2019 and for the arrears existing for 2017 and 2018. Each $1,000 bond is convertible into 45 common shares. The net income for 2019 was $900,000, the income tax rate was 30% and there were no transactions for Discontinued Items. [05] Now assume for this question only that Krown reported a basic earnings per share of $4.05. Determine the number of preferred shares which the company had outstanding during 2019.

Select one:

a. Zero preferred shares

b. 50,000 preferred shares

c. 40,000 preferred shares

d. 30,000 preferred shares

e. None of the above