A Company has become the subject of a takeover offer. The Companys current share price is $12.40 per share, and shareholders have been offered $17.00 per share. Calculate the fully diluted shares outstanding given the following information about the Company from Figure 1 and Figure 2 (next page) and the fact that the Company has convertible bonds outstanding with the following financial statement note regarding the bonds: the Company has outstanding $10 million of 5.25% convertible notes which are included in Long-term debt on the Balance Sheet. The notes are payable in cash at maturity unless holders exercise their option to convert the notes into shares of common stock. The initial conversion rate, provided under the terms of the Notes, is 76.9231 shares of common stock per $1,000 principal amount of notes.

Options Tranches 1 2 3 4 5 6 7 Balance Sheet Period Ending 30-Jun-18 30-Sep-18 31-Dec-18 As of 10Q Quarterly 10K Annual 10Q Quarterly Assets Cash 82,000,000 83,200,000 110,000,000 Accounts Receivable 5,600,000 6,100,000 7,100,000 Inventory 9,200,000 9,800,000 10,300,000 Current Assets 96,800,000 99,100,000 127,400,000 Property, Plant & Equipment 41,000,000 40,000,000 38,000,000 Goodwill 0 0 0 Total Assets 137,800,000 139,100,000 165,400,000 Liabilities 0 0 4,600,000 4,700,000 5,200,000 Short Term Debt Accounts Payable Current Liabilities Long Term Debt Total Liabilities 4,600,000 4,700,000 5,200,000 51,000,000 32,000,000 32,000,000 55,600,000 36,700,000 37,200,000 Shareholders' Equity Equity Capital 69,000,000 69,000,000 69,000,000 Shares outstanding 2,062,539 2,071,240 2,083,333 Retained Earnings 13,200,000 33,400,000 59,200,000 Shareholders' Equity 82,200,000 102,400,000 128,200,000 139,100,000 165,400,000 Liabilities & Shareholders' Equity 137,800,000 Figure 1 Stock Options Outstanding Stock Options Exercisable Weighted Average Weighted Average Exercise Price/Share Number Exercise Price/Share 8.50 11,100 8.60 9.20 10,400 9.10 11.40 8,400 11.90 TIT 13.10 16,100 12.40 16.40 3,900 16.55 18.90 600 18.61 19.50 1,900 19.90 20.60 3,300 20.30 55,700 Figure 2 Number 13,700 12,000 9,500 16,300 4,500 650 2,100 3,600 62.350 Options Tranches 1 2 3 4 5 6 7 Balance Sheet Period Ending 30-Jun-18 30-Sep-18 31-Dec-18 As of 10Q Quarterly 10K Annual 10Q Quarterly Assets Cash 82,000,000 83,200,000 110,000,000 Accounts Receivable 5,600,000 6,100,000 7,100,000 Inventory 9,200,000 9,800,000 10,300,000 Current Assets 96,800,000 99,100,000 127,400,000 Property, Plant & Equipment 41,000,000 40,000,000 38,000,000 Goodwill 0 0 0 Total Assets 137,800,000 139,100,000 165,400,000 Liabilities 0 0 4,600,000 4,700,000 5,200,000 Short Term Debt Accounts Payable Current Liabilities Long Term Debt Total Liabilities 4,600,000 4,700,000 5,200,000 51,000,000 32,000,000 32,000,000 55,600,000 36,700,000 37,200,000 Shareholders' Equity Equity Capital 69,000,000 69,000,000 69,000,000 Shares outstanding 2,062,539 2,071,240 2,083,333 Retained Earnings 13,200,000 33,400,000 59,200,000 Shareholders' Equity 82,200,000 102,400,000 128,200,000 139,100,000 165,400,000 Liabilities & Shareholders' Equity 137,800,000 Figure 1 Stock Options Outstanding Stock Options Exercisable Weighted Average Weighted Average Exercise Price/Share Number Exercise Price/Share 8.50 11,100 8.60 9.20 10,400 9.10 11.40 8,400 11.90 TIT 13.10 16,100 12.40 16.40 3,900 16.55 18.90 600 18.61 19.50 1,900 19.90 20.60 3,300 20.30 55,700 Figure 2 Number 13,700 12,000 9,500 16,300 4,500 650 2,100 3,600 62.350