Consider two firms, ABC and XYZ. The two firms are identical in every respect except their capital structure. ABC is an all-equity firm, with 1 million shares outstanding that trade at a price of $24 per share. XYZ has $12 million of debt.

Andrey has $5,000 to invest in ABC shares but he wants use homemade leverage to create the same cash flows that he would get from owning the levered XYZ shares. Assume he can lend and borrow at the same interest rate as XYZ. How many shares of ABC will Andrey need in order to replicate the cash flows of XYZ?

Question 4 options:

	827
	2017
	277
	417
	1657