The Las Vegas Bank of Canada [LVC] grants its executives each year with stock options as performance bonuses. On January 1, 2019, it issued 180,000 such stock options. Each option gave the holder the right to sell to LVC, one share of the Bank at the option price of $74 per share. None of these options have yet been exercised throughout 2019. Assume the average market price of LVC's common shares during 2019 was $40. Using the reverse treasury stock method, (i.e., cash out/cash in), what is the income impact and the number of shares that the Bank would use to calculate the diluted earnings per share for 2019?

Select one:

a.

$3,060,000 loss and 180,000 shares.

b.

$3,060,000 loss and 333,000 shares.

c.

$0 and 153,000 shares.

d.

$0 and 333,000 shares.

e.

None of the above answers are correct.