In computing diluted earnings per share (DEPS), the equivalent number of shares of convertible preferred stock is added as an adjustment to the denominator (number of shares outstanding). If the preferred stock is preferred as to dividends, which amount should be added as an adjustment to the numerator (earnings available to common shareholders)?

-Annual preferred dividend.

-Annual preferred dividend times (1 the income tax rate).

-Annual preferred dividend times the income tax rate.

-Annual preferred dividend divided by the income tax rate.