In its 2014 annual report, Merck & Co., Inc., reported that its basic earnings per share were \($4.12\) per share while its diluted earnings per share were \($4.07\) per share.

Discuss the factors that might cause the number of shares used in the calculation of earnings per share to increase, and thus, cause diluted earnings per share (EPS) to be less than basic earnings per share. Which measure do you feel is more important to shareholders—basic EPS or diluted EPS? Why?