1. Karen Corporation had a total of 600,000 shares of common stock outstanding at December 31, 2018. In addition, it had 150,000 stock options outstanding, which had been granted to the CEO and CFO of the company. The options allowed the executives to purchase shares of Karens stock at a discounted price of $20 per share. The average market price of Karen Companys common stock for 2018 was $30 per share.

Required: Using the treasury method, what is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2018? Note you do not have to calculate Diluted Earnings Per Share.