On January 1, 20X1, the manufacturer Desperate for Cash, Inc. issued $150 million of notes that bear annual interest of 10% and are convertible into 25 million common shares. The interest expense on the notes is tax-deductible and the firms tax rate is 30%. The firms net income for 20X1 is $100 million and its basic EPS is $2.00. The firm has not issued any other potentially dilutive securities. What is the firms diluted EPS under the if-converted method for 20X1:

Select one:

a.

$2.00

b.

$4.42

c.

$1.47

d.

$1.33

e.

$1.53