XYZ Corporation has 500,000 common shares and 50,000 6% cumulative preferred shares outstanding. Preferred shares have a par value of $100 per share. XYZ paid no dividends in 2020. It reported net income of $2.5 million. On January 1, XYZ granted its executives 10,000 stock options. Each option entitles its holder to purchase 20 shares of common stock at an exercise price of $29 per share. Options require a one-year service period. The average market value of the shares was $30 per share during 2020.

What is the diluted earnings per share for 2020?

Select one:

to. $3.14

b. $0.0 Options are anti-diluents.

c. $4.90

d. $4.34