Question - The following information was extracted from Smurm Corporation's 2006 annual report:

Common stock

Share outstanding 12/31/05, 90 million

New shares issued 4/1/06, 10 million

Shares outstand 12/31/06, 100 million

Preferred stock $10 par, 10%, convertible into 2 shares of common stock, shares

Outstanding 50 million

Options 1 million options, each to purchase one common share at $50 per share

Market price of stock

Average for year $75

Beginning of year $70

End of year $78

Preferred dividends paid $50,000,000

Net income for 2006 $350,000,000

Using the treasury stock method, the options would result in how many extra shares being recognized in the diluted EPS calculation:

500,000

358,975

333,333

285,714