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FIN341, Inc. is considering converting its all-equity capital structure to one that is 20 percent debt. Currently there are 15,000 shares outstanding and the price

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FIN341, Inc. is considering converting its all-equity capital structure to one that is 20 percent debt. Currently there are 15,000 shares outstanding and the price per share is 60 baht, and you are holding 300 shares. EBIT is expected to remain at 800,000 per year forever. The interest rate on the new debt is 8 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? O Sell 75 shares and lend the proceeds O Borrow to buy 75 more shares Sell 90 shares and lend the proceeds O Borrow to buy 90 more shares O Sell 60 shares and lend the proceeds O Borrow to buy 60 more shares

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