An all-equity firm is with a total market value of $400,000 and 20,000 shares of stock outstanding. Management is considering issuing $70,000 of debt at an interest rate of 5 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?

Multiple Choice

3,200 shares

3,300 shares

3,500 shares

3,400 shares