Pursue Co. takes over Subjugate, Inc., purchasing S common shares at a price equating to 80% of

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Pursue Co. takes over Subjugate, Inc., purchasing S common shares at a price equating to 80% of S' net book value. The weighted average number of common shares outstanding for P is 100k, and S has 50k common shares outstanding. During the subsequent year, P and S have $150k and $40k in Net Income and declare dividends on common of $10k and $5k respectively. P also has 10k shares outstanding of $100 par 5% preferred stock, each share convertible into 10 shares of P common; S has $100k of 6% convertible bonds outstanding convertible into 20 shares of S common per bond. S also has 2k stock purchase warrants outstanding, allowing the purchase of 1 share of S common each at a striking price of $100. The warrants have been in the money with the stock having an average price of $103 for 10 of 13 Friday closings during each quarter of the year, and P owns none of them. The average tax rate for the affiliates is 40%. Consolidated diluted EPS is a. $1.00 b. $2.00 c. $1.50 d. $0.75