Rudyard Corporation had 250,000 shares of common stock and 25,000 shares of 8%, $100 par convertible preferred stock outstanding during the year. Net income for the year was $550,000 and dividends were paid to both common and preferred shareholders. Rudyard's effective tax rate is 25%. What is Rudyard's basic EPS?

Multiple Choice

• $1.27.

• $3.00.

• $2.20.

• $1.40.