At December 31, 2007, Pratt Company Had 500,000 Shares of Common

Multiple Choice

At December 31, 2007, Pratt Company had 500,000 shares of common stock outstanding. On October 1, 2008, an additional 100,000 shares of common stock were issued. In addition, Pratt had $10,000,000 of 6% convertible bonds outstanding at December 31, 2007, which are convertible into 225,000 shares of common stock. No bonds were converted into common stock in 2008. The net income for the year ended December 31, 2008, was $3,000,000. Assuming the income tax rate was 30%, the diluted earnings per share for the year ended December 31, 2008, should be (rounded to the nearest penny)

A) $6.52.
B) $4.80.
C) $4.56.
D) $4.00.