9. A firm has a capital structure containing 40 percent debt, 10 percent preferred stock, and 50 percent common stock equity. The firms debt has a yield to maturity of 9.50 percent. Its preferred stocks annual dividend is $7.50 and the preferred stocks current market price is $50.00 per share. The firms common stock has a beta of 0.90 and the risk-free rate and the market return are currently 4.0 percent and 13.5 percent, respectively. The firm is subject to a 40 percent marginal tax rate. The market value of debt is $100 million. How many shares of preferred stock should be outstanding for the capital structure to be correct?

a.	125,000 shares
b.	500,000 shares
c.	250,000 shares
d.	625,000 shares