The following is a table showing the calculation of earnings per share as it appears in the 2009 financial statements of Microsoft Corporation.

a. Why are there two earnings per share numbers reported?

b. What does “Basic” mean under “Earnings per share”?

c. What does “Diluted” mean under “Earnings per share”?

d. For all three fiscal years, both earnings per share measures in a given fiscal year are close in value. What does that suggest?

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In millions, except earnings per share Year Ended June 30, 2009 2008 2007 Net income available for common shareholders (A) $14,569 $17,681 $14,065 Weighted average outstanding shares of common 8,945 9,328 9,742 stock (B) Dilutive effect of stock-based awards 51 142 144 Common stock and common stock equivalents (C) 8,996 9,470 9,886 Earnings per share: Basic (A/B) $1.63 $1.90 $1.44 Diluted (A/C) $1.62 $1.87 $1.42