Information Concerning the Capital Structure of Shelmardine Corporation Follows During 2020, Shelmardine Paid Dividends of $ 1

Information concerning the capital structure of Shelmardine Corporation follows $$\begin{array} { l l l } &\quad\quad\quad\quad \text{ \underline{\text{ \textbf{ December 31, } }} } \\ & \underline{2020} & \underline{2019} \\\\\text{ Common shares outstanding } & \text{ 100,000 shares } &\text{ 100,000 shares } \\\text{ Convertible preferred shares outstanding }&\text{ 10,000 shares } & \text{ 10,000 shares } \\\text{ 9 \% convertible bonds } &\$ 2,000,000 & \$ 2,000,000 \\ \end{array}$$ During 2020, Shelmardine paid dividends of $ 1.00 per common share and $ 2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2020 was $ 500,000. Assume the income tax rate is 30%. What is the diluted earnings per share for 2020?

A) $ 4.00
B) $ 3.68
C) $ 3.54
D) $ 2.94