Use the following information to answer the next five questions.

Notes payable, 10% coupon, $1,000 par value	$1,000,000
Common stock, $1 par, 3,000,000 shares authorized, 500,000 shares issued and outstanding	$500,000
Capital in excess of par	$2,000,000
Retained Earnings	$9,000,000

The following information is also provided:

1. The income tax rate is 40%.
2. The common stock was outstanding for all of 2010.
3. Net income was $1,750,000 for 2010.
4. No bonds or preferred stock were converted during 2010.

Options were granted in July of 2009 to purchase 50,000 shares of common stock at $20 per share. The average market price of Blue Jays common stock during 2010 was $30 per share. All of the options are still outstanding.

Based on this dilutive EPS is closest to

	$2.50
	$3.00

	$3.50
	$4.00