Pundit Corporations 2018 financial statements include the following discussion regarding its use of put options (from Note 9): In January 2016, the company implemented a stock repurchase program to repurchase up to 1 million shares of its stock. In conjunction with the companys stock repurchase program, the company issues put options that give the purchaser the right to sell shares of Pundit stock to the company at specified prices on specific dates. Plan activity is as follows: Put Options Balance, December 31, 2016 600,000 Options issued on 1/1/17 100,000 Options exercised during 2017 (300,000) Balance, December 31, 2017 400,000 Options issued 0 Options exercised 0 Balance, December 31, 2018 400,000 Pundits stock price was $30 per share on 12/31/18, and the companys stock price averaged $32 per share during 2018. Assume that (1) all of the companys put options can be exercised one year after issuance and expire five years after issuance and (2) all of the outstanding put options on 12/31/18 have an exercise price of $36 per share. Also, assume that Pundits net income for 2018 was $10 million and that the companys weighted-average number of common shares outstanding for 2018 was 4.5 million. Pundit has no other potential common shares. Required: Calculate Pundits basic and diluted EPS for 2018.