You Currently Own 600 Shares of JKL,Inc

Multiple Choice

You currently own 600 shares of JKL,Inc.JKL is an all equity firm that has 75,000 shares of stock outstanding at a market price of $40 a share.The company's earnings before interest and taxes are $140,000.JKL has decided to issue $1 million of debt at 8 percent interest.This debt will be used to repurchase shares of stock.How many shares of JKL stock must you sell to unlever your position if you can loan out funds at 8 percent interest?

A) 120 shares
B) 150 shares
C) 180 shares
D) 200 shares
E) 250 shares