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Throughout 2019, Smith had 650,000 shares of common stock outstanding. Smith's net income for the year ended 12-31-19 was $1,200,000. Smith's income tax rate is 30%. During 2019, Smith declared and paid $400,000 of dividends on 100,000 shares of its 2%, $100 par value, cumulative preferred stock. During the entire year ending 12-31-19, Smith had 20,000 outstanding employee stock options. Each option had an exercise price of $60. During the year ended 12-31- 19, the average market price of Smith's common stock was $55 per share. As of 12-31-19, Smith had $5,000,000 of 4% convertible bonds. Smith issued the bonds at face value during 2015. The bonds can be converted into 100,000 shares of Smith's common stock. What will Smith report as its diluted earnings per share for the year ended 12-31-19? $1.79 $1.23 x $1.52 $1.25 _