Information concerning the capital structure of Piper Corporation is as follows:

December 31,

2011 2010

Common stock 150,000 shares 150,000 shares

Convertible preferred stock 15,000 shares 15,000 shares

9% convertible bonds $2,400,000 $2,400,000

During 2011, Piper paid dividends of $0.80 per share on its common stock and $2.00 per share on its preferred stock. The preferred stock is convertible into 11,000 shares of common stock. The 6% convertible bonds are convertible into 75,000 shares of common stock. The net income for the year ended December 31, 2011, was $400,000. Assume that the income tax rate was 30%.

compute diluted EPS.

a. $2.25

b. $2.47

c. $2.87

d. $2.09

e. $2.23

f. $2.12