On December 31, 2019, Lingo. had 1,000,000 common shares outstanding. On January 1, 2020, Lingo issued 250,000 non-cumulative preferred shares, which were convertible into 500,000 common shares. During 2020, Lingo paid cash dividends of $450,000 to the common shares and $150,000 to the preferred shares. Net income for calendar 2020, was $4,500,000.

Assuming an income tax rate of 30%, the diluted earnings per share for 2020 is:

$3.00.

$2.57.

$4.50.

$0.33.