The lower portion of the 2006 income statement for McDonald’s follows (dollars in million):

Income from continuing operations ......... 2875.0

Income from discontinued operations net of taxes ... 671.2

Net income .................. $3544.2

Basic earnings per share:

Continue operations ................ $2.33

Discontinued operations .............. 0.54

                                                            $2.87

Diluted net earnings per share:

Continuing operations .............. $2.30

Discontinued operations ................ 0.53

                                                            $2.83

Required

(a) Why is there a distinction between net earnings from continuing operations and net earnings from discontinued operations?

(b) Estimate the number of common shares outstanding.

(c) Why is there a distinction between basic net earnings per share and diluted net earnings per share?

(d) Estimate the number of common shares that would be outstanding if all potentially dilutive securities were converted to common shares.