1. An analyst gathered the following data about a company:
·1,000,000 shares of common are outstanding at the beginning of the year.
·10, 000 6% convertible bonds (conversion ratio is 20 to 1) were issued at par June 30 of this year.
·The company has 100,000 warrants outstanding all year with an exercise price of $25 per share.
·The average stock price for the period is $20, and the ending stock price is $30.
If the convertible bonds are considered dilutive, the number of shares of common stock that the analyst should use to calculate diluted earnings per share is: