Gilley Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2007 . The preferred stock is convertible into 40,000 shares of common stock. During 2007 , Gilley paid dividends of $.90 per share on the common stock and $3.00 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2007 was $600,000 and the income tax rate was 30%. Diluted earnings per share for 2007 is (rounded to the nearest penny) $2.14. $2.25. $2.35. $2.46