AppleBanana, Inc. is considering converting its all-equity capital structure to one that is 40 percent debt. Currently there are 50,000 shares outstanding and the price per share is 49 baht, and you are holding 1,500 shares. EBIT is expected to remain at 1 million baht per year forever. The interest rate on the new debt is 7 percent, and there are no taxes. Assume that you want to use homemade leverage to re-create the original capital structure, what would you do?

		Sell 600 shares and lend the proceeds
		Borrow to buy 600 more shares
		Sell 375 shares and lend the proceeds
		Borrow to buy 375 more shares
		Sell 525 shares and lend the proceeds
		Borrow to buy 525 more shares