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  3. 19. during 2021, farewell inc. had 500,000 shares

19. During 2021, Farewell Inc. had 500,000 shares of common stock and 50,000 shares of...

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19. During 2021, Farewell Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2021. Farewell's net income for the year ended December 31, 2021, was $2.5 million. The income tax rate is 25%. Farewell granted 10,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $29 per share. The options vest after one year. The market price of the common stock averaged $30 per share during 2021. What is Farewell's diluted earnings per share for 2021, rounded to the nearest cent? A) $3.14 B) $4.90. C) $4.34 D) Cannot determine from the given information

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