Answer:
Basic EPS = $1.359 million 
Diluted EPS = $1.195 million
Explanation:
For Basic EPS we need to calculate the number of shares outstanding
Shares as on Jan 1 = 450 million
Treasury shares on Sep 1 =  48 million × (4 months ÷ 12 months)
                                            = 16 million
Number of shares o/s =  Shares as on Jan 1 - Treasury shares on Sep 1
                                     = 450 million - 16 million
                                     = 434 million
Basic EPS = Net Income ÷ Number of shares o/s
                  = $590 million ÷ 434 million 
                  = $1.359 million
For Diluted EPS,
Interest savings = 10% × $ 250 million
                            = $25 million
Adjusted Net Income =  Net Income + After tax interest savings
                                = $590 million +  [25 millions - 40(25million)]
                                = $590 million - $15 million
                                = $575 million
and weighted number of shares will include the bonds, that are convertible
Outstanding shares as computed = 434 million
Bond conversion Shares = 47 million
Total shares outstanding =  Outstanding shares as computed + Bond conversion Shares
                                           = 434 million  + 47 million
                                           = 481 million
Diluted EPS = Adjusted Net income ÷ Total shares outstanding
                     = $575 million ÷ 481 million 
                     = $1.195 million