Rudyard Corporation had 220,000 shares of common stock and 22,000 shares of 8%, $100 par convertible preferred stock outstanding during the year. Net income for the year was $640,000 and dividends were paid to both common and preferred shareholders. Rudyard's effective tax rate is 25%. Each share of preferred stock is convertible into five shares of common stock. What is Rudyard's diluted EPS (rounded)? Multiple Choice $5.00. $3.71. $1.94. $2.64.