On January 1, 2018, Warren Corporation had 1,000,000 shares of common stock outstanding. On March 1, the corporation issued 200,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 600,000 of its own outstanding shares and retired them. In 2017, Grimm issued 6,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 40 shares of common stock. The par value of the common stock is $1. No bonds were converted into common stock in 2018. Net income for 2018 is $3,000,000. The company has no preferred stock. Assume the tax rate is 40%. Instructions a) Compute the weighted average number of shares to be used in computing basic earnings per share for 2018. b) Compute diluted earnings per share.